Early this month it was revealed that India, not China, had surpisingly been the buyer for half of the International Montary Fund's 400 tons of gold for sale. Not only was that event a bit of a shock, but since China missed out on the first batch, it was assumed that SURELY they would get the second 200 tons for sale. But it appears India might want that batch as well! India has already made a mint (pun intended) on their first IMF purchase...
- Gold climbed to the highest price ever (nominal, not real!), capping the longest rally in 27 years, as the dollar’s slump deepened and on a report that India’s central bank may add to last month’s 200 metric-ton purchase.
- Gold reached a record $1,189 an ounce and has rallied 13 percent since Nov. 2, after India said it bought bullion from the International Monetary Fund. The country, the world’s largest gold consumer, may buy more from the IMF, the Financial Chronicle reported. U.S. Dollar Index, a six-currency gauge of the greenback’s strength, fell to a 15-month low.
I'm trying not to write story after story about gold, but it is simply dominant right now, and I believe it might be entering a phase here akin to what happened to oil in 2007-2008. Hedge funds and other institutional money chasing after a very viable thesis (then = Chindia's new middle class is increasing the demand for oil, now = central banking policies are hammering at fiat paper currency) and taking prices up from levels that reflect the thesis, and up... up... and away. But do I believe gold will fall at a & akin to $147 to $40 like oil did? No. Ben Bernanke's relentless self belief that his way is the only way should prevent that. As with oil at $110, $120, $130 ... you can scoff but until the momentum train ends, you never know where the psychology will take the price.
Speaking of Ben... the dollar is down another 1% today; what a turkey.
Long Powershares DB Gold Double Long in fund, no personal position