Gold is money in extreme times, have they arrived?

It was Alan Greenspan who said that, “gold is money in extremis”. By this all understood that when times got tough, gold became money that people could trust. But what constitutes “in extremis”?
 

History, with hindsight, usually finds it easy to answer such a question. Event with hindsight such a precise tool, it is of no use to investors who don’t have the privilege of using it. For instance it is clear that a year before the last war, no, almost 5 years before the last World War, it was clear that the world was on the path to the war. One year before the war started the Prime Minister of Britain came back from Germany with the cry, “Peace in our time” heralding his belief that there would be no war. On the ground, opinions were divided right up until Germany marched into Poland.

Sudan digs for gold as prices rise

At least one-quarter of Sudan could be rich territory for gold mining, making it a hot-spot for foreign companies exploring there.

In recent years, individual mining has reached unprecedented proportions and figures indicate that at least 50,000 people are believed to be working in Sudan's northern desert.

Gold prices will keep rising, says Newmont boss Richard O'Brien

NEWMONT Mining chief executive Richard O'Brien says gold may rise to $US1350 ($1454) an ounce next year and reach as high as $US1500 within two years because of the declining dollar and new investment demand.

"I'd say next year we could maybe see as much as a $150 improvement," Mr O'Brien said.

Gold price slumps as dollar strengthens

The gold price has slumped after surprisingly good US unemployment data sent the US dollar higher, making gold a less attractive investment.

Gold fell more than $76, or 6%, to $1,150 an ounce, down from a record high of $1,226.56 in early trading.

After figures showed the US jobless rate falling, the dollar gained 2% on the Japanese yen and 1.3% on the euro.

Gold has hit a number of record highs in recent weeks as the dollar weakened due to low interest rates in the US.

Gold hits yet another record high

The price of gold has struck yet another record high as the dollar continues to weaken.

Renewed vigour in early trading in London pushed gold to a new high of $1,217.23 an ounce. It has hit a number of new highs in recent weeks.

Other precious metals have also rallied strongly. Silver, at $19 dollars an ounce, is 5% off its all-time high.

Demand for gold is being driven by two main factors - a weak dollar and investors' appetite for safe assets.

Why the Rise in the Gold Price is Different this Time.

For over more than 18 months we have watched the gold price churn below $1,000 and in the process forming three tops, before breaking out to above $1,050 in early October 2009. Why will it not fall back to well below $1,000 and possibly as far as $850 this time?

Technical Picture

Peter has given a great deal of detail below, in this issue and has warned, precisely, of the various support and resistance levels to watch out for. This information is critical for you, the subscriber, so as to help in your buying and selling considerations.

The U.S. $

For many months now too, while traders played the gold price against the U.S. $ the gold price has been precise in its inverse correlation to the $. We believe that this has mistakenly led commentators to place far too much emphasis on the $, as the inverse measure of gold.