As we can see from Kitco's chart of gold prices, gold has blown right through its previous high of $1033/oz and is currently trading at $1041.50 as we write. This is great news for holders of gold and its associated mining stocks as gold has flirted with the $1000/oz level for some time now and many investors were becoming frustrated at golds inability to hit new highs.
The twenty dollar rise in todays session has certainly thrust gold prices back under the media spotlight and has also brought some relief to precious metals bugs across the globe.
As we have repeatedly told our subscribers gold prices are primarily an inverse reaction to the movements of the US Dollar at this point in time. The chart of the dollar below depicts its demise over the last few days.
Another nail in the dollars coffin came in the form of a report by Robert Fisk of the UK newspaper The Independent, entitled; The demise of the dollar, which includes this rather devastating snippet:
In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading.
The dollars status as the worlds reserve currency is now shaky at best with the ramifications of quantitative easing, bailouts and the booming money supply slowly being understood by the investment community. Holding dollars is not the safe haven it once was, hence the flight to real money, gold, has just begun.
We expect gold prices to consolidate above the $1033/oz over the next few days and by New Years Eve we expect gold to be trading at around $1250/oz so there is no time to waste. Buy a few of your favourite quality producers and hang on as the short term will be an explosive white knuckle ride.
Have a sparkling day.
Your thoughts are of course most welcome.
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