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In the past, the fearful have bought gold and driven up bullion prices to nearly US$2,000 an ounce in recent history.
What’s curious is that gold prices have ebbed, the bitcoin is not a viable alternative and yet fears remain. Even worse is that the debt and currency contagion has spread and the world’s four biggest economic entities – the U.S., EU, China and Japan – are printing and piling on debts with frightening speed.
So why isn’t gold at US$4,000 an ounce?
One bearish factor this week was Goldman Sachs’s downgrade of its gold price forecast for the second time in weeks. Commenting that “conviction in holding gold is quickly waning,” Goldman’s forecast is an average of $1,545 an ounce in 2013 and $1,350 in 2014.
Gold bugs claim that a conspiracy exists to dampen gold’s values. One of the theorists is Reaganomics guru Paul Craig Roberts, former Assistant Treasury Secretary.
This week he wrote: “Financial and economic Armageddon might be close at hand. The evidence for this conclusion is the concerted effort by the Federal Reserve and its dependent financial institutions to scare people away from gold and silver by driving down their prices. When gold hit $1,900, the Federal Reserve panicked because they realized with the dollar deteriorating so rapidly, compared to bullion prices, that soon it would also deteriorate its exchange value with other currencies. The Fed had to cap the price of gold and stop the rise.”
It’s certainly one explanation as to why gold is down given eurozone, Japanese, American and now Chinese woes. But another is that speculators have been dumping gold ETFs and flooding into the U.S. dollar, U.S. equities and the US-dollar denominated bonds.
The Yankee dollar has become a safe haven again.
The sharenet sharepicks does not allow smallcap shares - eg ACT, CGR, ADI etc, this would be a good option
"The offer is still firm. I have explained that the Takeover Regulation Panel made this clear when they approved the letter I sent last month to Adcock. Adcock is just wasting its time. Ultimately the board has to take our offer to shareholders in terms of company law‚" he said.
Joffe was away in London but he would "take his next step" when he returned to SA.
"Maybe we will raise our offer or maybe we will walk away. We will take action‚" he said.
