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| Updated: 3 June, 2007 |
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June 3, 2007 As the typically laggardly (at least for gold prices) summer months begin, the ever present question, "will gold go up or down after summer?" is heard bantered about. Well, since the supply of gold is slightly below demand, or about even with demand, according to whom one listens, one thing no one can argue with is the value of the US Dollar. It is shrinking daily, with respect to foreign currencies. Around May 20th, Kuwait announced that they were no longer pegging their currency to the US Dollar, but on a mixture of foreign currencies that included the dollar, but reduced their exposure to the USD. And, as we all know, the price of gold is primarily affected by supply, demand, crisis, and currency fluctuations. I expect that some other countries will likewise reduce their exposure to the USD, in the near future. These actions will bring the USD back as a primary facilitator in the rising price of gold. It is an inverse relationship between the USD and gold, when the buck is low, gold is high. All this bodes well for gold bugs, and it looks like this year will go out with a bang, with gold closing at +$800 and possibly in the $900 range. This would set a new all time record for the price of an ounce of the yellow metal. I am going to lay in my stock of New Years Eve Bubbly early, for it will certainly be called for on the end of December 2007. |
| Charles Kubach Mine-Engineer.Com Return To Gold Page |
