The Thing With Gold

In December, a historical first happened for gold. It went in to 'backwardation'. It is a situation where the spot price is lower than the future price. In other words, a situation where you can sell your gold now at a higher price and buy it back next month at a lower price if you bought the Jan futures. Why, everyone should have taken that profit and hence it should have disappeared in no time. But it persisted for a while. (frankly, I don't know if is still there) This happened because people didn't want to sell the physical gold for a future profit. People didn't have confidence in the 'paper gold' or the ability of COMEX to deliver the gold in future.

It is speculated that the gold price is suppressed artificially. In the present scenario, the currencies are shaky. Dollar is practically doomed. Euro's future is also uncertain. No stimulus package is going to save the day. Where do you think all that money is going to come from? The govts will print money, thereby debasing the existing currency. So it will be a good idea if one had a little gold or silver as part of their savings. Even if there is hyperinflation, one can still buy things with gold.

Last time I heard, they needed 50 Billion of their dollars to buy 2 loaves of bread in Zimbabwe.