Gold continues to move higher ?
After the Fed meeting of yesterday Gold is a little down at $ 1014 /ounce in today’s morning trade. The dollar stands at 1.4770 against the Euro.
So will Gold continue to move higher?
Ok, a short term setback is always possible. Gold is rather volatile and attracts a lot of short term traders and hedge funds.
But as I pointed out, watch for the strategic moves of the Asian countries and the Oil producing Arab countries!
Will they continue to move away from the US-$ as their dominant currency reserve and diversify? Gold is clearly one of their options.
Don’t forget that the US and the other Western countries lost a lot of credibility during the financial crisis. Asia looks at this as a Western crisis.
The level of Western indebtness worries Asia where neither the countries nor the banks or consumers are leveraged as their Western counterparts.
A good indicator could be the declarations of China and other Asian countries at the G-20 summit in Pittsburgh.
They already ask for more voting rights for Asian countries within the IMF. And definitely this will not be their last move.
Recently the last „bear” of the big gold mines, Barrick Gold (NYSE: ABX), threw in the towel and annouced a huge $ 5.6 billion charge in Q3 2009 in order to eliminate their fixed price gold contracts, reflecting an „increasing positive outlook on the gold price”.
Stay tuned!