Friday, February 10, 2006
The Housing Bubble And Gold
This topic was recommended at the housing bubble blog. "When the housing bubble pops will the price of gold go higher as a result?"
And a morning look at metals trading. "Gold futures fell early Friday, dragging other metals with them, after chalking up gains of more than $14 an ounce the previous day. Gold for April delivery was last trading down $5.30 at $562.80 an ounce on the New York Mercantile Exchange."
"Action Economics said gold was also hit by a strong yen. The yen rallied following strong Japanese data, squeezing out some yen-funded margin long positions in gold."
"Silver futures were last trading down 9 cents at $9.57 an ounce. Platinum was down $10.90 at $1,063 an ounce, while sister metal palladium lost $6.65 to $297.80 an ounce."
And a morning look at metals trading. "Gold futures fell early Friday, dragging other metals with them, after chalking up gains of more than $14 an ounce the previous day. Gold for April delivery was last trading down $5.30 at $562.80 an ounce on the New York Mercantile Exchange."
"Action Economics said gold was also hit by a strong yen. The yen rallied following strong Japanese data, squeezing out some yen-funded margin long positions in gold."
"Silver futures were last trading down 9 cents at $9.57 an ounce. Platinum was down $10.90 at $1,063 an ounce, while sister metal palladium lost $6.65 to $297.80 an ounce."
# posted by Ben Jones @ 7:21 AM 
Comments:
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wmbz,
I can imagine one scenario that would be bullish for gold. If the fall-out from a housing bust were severe enough, it could cause a dollar run. If these overseas tresury and MBS holders decided to sell in any number, they would almost certainly pull out of the greenback. Just the drop in the dollar could run up the price of gold, and other commodities as well.
I can imagine one scenario that would be bullish for gold. If the fall-out from a housing bust were severe enough, it could cause a dollar run. If these overseas tresury and MBS holders decided to sell in any number, they would almost certainly pull out of the greenback. Just the drop in the dollar could run up the price of gold, and other commodities as well.
Currency Strategists: Goldman Says Dollar Has Reached `Peak'
Gold ETF Impact
"According to the World Gold Council, only 29 nations now report individual official gold reserves larger than this two-month GLD increase! And only 16 nations now hold more physical gold reserves than GLD!
Gold ETF Impact
"According to the World Gold Council, only 29 nations now report individual official gold reserves larger than this two-month GLD increase! And only 16 nations now hold more physical gold reserves than GLD!
(If the housing bust is large and fear great enough, people will be looking for safe harbor and the dollar will not be the direction they head.)
yes, but there is one thing. everyone needs some cash in their pocket or their bank account, which is EXACTLY what most of them DON'T have. just a thought. remember, people have no savings.
yes, but there is one thing. everyone needs some cash in their pocket or their bank account, which is EXACTLY what most of them DON'T have. just a thought. remember, people have no savings.
Housing will take down the stock market along with the broader economy. A recession will hammer the dollar, driving up the price of everything imported (along with gold).
Twice suffering third-degree burns in the stock market and a first-degree burn in housing, Joe sixpack will obviously be loathe to invest in anything.
Still, he will be working as hard as he can -- 70% of people are still working even in a depression -- and saving furiously, having seen his 401K, benefits and equity disappear and fearing for his future. Furthermore, he has to worry about keeping pace with an ever-increasing cost of living.
In the end, he'll return to the only truly safe currency for thousands of years -- gold!
This will all take a while, of course, but the resulting bubble will make the rest of us rich.
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Twice suffering third-degree burns in the stock market and a first-degree burn in housing, Joe sixpack will obviously be loathe to invest in anything.
Still, he will be working as hard as he can -- 70% of people are still working even in a depression -- and saving furiously, having seen his 401K, benefits and equity disappear and fearing for his future. Furthermore, he has to worry about keeping pace with an ever-increasing cost of living.
In the end, he'll return to the only truly safe currency for thousands of years -- gold!
This will all take a while, of course, but the resulting bubble will make the rest of us rich.
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