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China and Gold
China’s announcement that it has more than doubled its official gold holdings to over 1,000 tonnes is significant as much for the politics of its timing as for the news itself. Indeed it is only one of several recent announcements made to position China for greater influence as the world financial system faces the prospect of its biggest changes since the 1971 Smithsonian Agreement.
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The dollar may seem fundamentally weak and a poor store of value but it reigns supreme as a transaction currency, particularly in Asia. Even were the yuan to be fully convertible and the all trade…
Investing in Gold
Waiting for Gold’s Next Rally
Last week we saw a bounce in the stock market that threatened to send the price of gold down to the $920 mark. After a lightening advance celebrating the approval of the quasi-nationalization of America’s too-big-to-fail mortgage providers, the market caved on reports of continued stress in the homebuilders.
The Dow gave back almost five days’ worth of gains in one fell swoop.
So should we not have seen a better bounce in gold? Maybe it’s too early to call the Dow.
Further weighing on gold prices were a lifeless bounce in oil and the market’s shift in focus…
30Jul2008 | Whiskey and Gunpowder | Comments Off | Continued
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