Rising Gold Prices: Good Sign for the Economy?

Gold has put down this week a huge price jump from $ 50 per troy ounce. But why? The demand from the jewelry industry has not increased in any case. A more likely explanation is that the market is still plagued by crisis fears – because if and gold always comes into play.

The stock markets may rise again, but overcame the Great Depression is therefore still a long shot. Like a raging epidemic further it travels: from the financial sector in the real economy, and finally (thanks to the hundreds of billions of comprehensive economic programs in the middle) into the public budgets.

Best evidence of the persistence of the crisis – and the crisis mentality – is is the sudden increase in the gold price. Out of the blue, the more expensive per ounce this week, at $ 50. So strong were the quotations for those critical early days, not risen, as Eastern Europe threatened a wave of Staatspleiten than the fate of the global economy seemed to hang by a thread.

The demand from the jewelry industry, it can hardly have been that triggered the recent run most precious metal. The Indian, Arabic and Turkish goldsmith hold back with purchases at the present price level. Now others are doing, namely, institutional and private investors looking for the famous safe harbor. Rumors going around of massive gold-orders by large hedge funds or Far Eastern central banks. A lot of hearsay, little more substantial.

Clearly, if price of ounces headed despite the economic Fast on the 1000-dollar mark, which says a lot about the state of the world. Nearly a year after the spectacular collapse of Lehman Brothers, the epitome of investment banking, is the distrust of the system is still great.

Gold is the mother of all the alternatives: the alternative to equities (which are notoriously volatile), bonds and notes (to be repaid, perhaps, perhaps not), the alternative to cash (whose value seems to be no longer receiving the first rule of central bankers. ) And on top of some will perhaps think that the fiscal demands, which will come as a result of record debt, well, let stand better with a few Krugerrands in the vaults.

Gold – the ultimate alternative – so long will be asked further, as holding that the concern that the global economic damage Subprime, Fannie Mae and Hypo Real Estate have done, to be addressed by official government tolerated inflation. So far, politicians and politicians have the money savers can not convince them that they can stop the printing presses in time. Thus gold is the currency of the distrust.

Comments are closed.