why is gold not going up?
Gold is now just under 890 USD oz. The stock markets around the world have rallied in the last month of March 2009, while the US is printing money like never before, bailing out banks with taxpayers money, running the worst budget deficit in history. The world is in a recession that’s getting worst and worst, goverments are engeging in serious spending to try to stimulate spending and ease credit. All this MAY lead to a gradual and slow recovery, however it would also point to inflation, higher interest rates, USD depreciation, and foreign investors no longer buying US debt. I read lots of books and followed news articles about how everything was going to crash and gold was going to go up. Well, anyone would like to share on why it is not? Would you buy gold or short gold? on a totally different questions, does anyone know how to short the USD against other currencies like the chinese Yuen, Korean Won, Cnd dollar, etc? (I am canadian with of course canadian dollars to invest)
Related posts:
- Canadian Maple Leaf Gold Coin Canadian Maple Leaf Gold Coin The Canadian Maple Leaf Gold Coin is a fantastic investment today.The maple leaf is minted by the Royal Canadian Mint and is the countries official...
- World Gold Bullion Coins: Gold Eagles, Gold Maple Leaf, Krugerrand, and More World Gold Bullion Coins: Gold Eagles, Gold Maple Leaf, Krugerrand, and More Coins are usually collected just as a hobby. But you can actually buy these things called gold bullion...
- American Eagle Gold Coins-Gold Coin Investing To Hedge For The Future American Eagle Gold Coins-Gold Coin Investing To Hedge For The Future Economic times are cyclical. And while they are cyclical, when one thing is up, usually something is down. When...
- Canadian Maple Leaf Gold Coin Investment Canadian Maple Leaf Gold Coin Investment The Canadian Maple Leaf Gold Coin is a fantastic investment today.Minted by the Royal Canadian Mint, it is the official gold coin of Canada.The...
- Gold Coins - the Right Type of Gold for Your Portfolio Why are gold coins better then gold bullion?1. Gold coins can appreciate at a faster rate then gold bullion.2. Gold coins are exempt from confiscation by the U.S. government.3. Gold...
When people are loosing their jobs and their salaries are being cut. Then they have less money to spend. And in that kind of a situation deflation rather than inflation is the result.
The printing of money in USA is much smaller than the wealth that has been lost due to bad loans and declining asset prices. And that’s why everyone is decreasing their spending, despite the printing of money.
You have to take into account the relative amounts of money that has been lost and that has been printed in order to know whether inflation or deflation is likely.
Gold did go up quite a bit as the stock market fell and many investors wanted some form of security.
However, gold is likely overpriced at this stage, and many stocks are now likely underpriced. Gold can get into storage costs, and if things get really bad, gold can only do so much for you, especially if you don’t store it where you yourself can readily access it. (And if you do store it where you can access it, you start to get into security issues, etc.)
Anyway, gold only goes up so far and then people start realizing things like real estate and some stocks and even consumer goods are better values.
Over the long-term I’d be looking to short gold, but it could still be another year or two before it moves significantly.
And if you wanted to short the US dollar, you’d purchase them at a good exchange rate, and then convert them to whatever else it is you think is stronger. If the dollar falls, the currency you hold is more valuable relative to the dollars you converted. (You’d also assess whether or not you wanted to go directly from Canadian to the Asian currencies or if there’s advantage to going through U.S. dollar first.)