Summer Break Ends Early for Gold Prices

Posted July 22, 2008

“I blame high oil prices on gold. Well, I’m not completely serious, but I can’t help but feel that gold isn’t holding up its end of the bargain. Investors are dumping their money into oil because nothing else is going up – including gold.” — Andrew Gordon

by Andrew Gordon

Baltimore — (TFN): I blame high oil prices on gold.

Well, I’m not completely serious, but I can’t help but feel that gold isn’t holding up its end of the bargain. Investors are dumping their money into oil because nothing else is going up – including gold. That’s a bit strange. Gold loves uncertainty, and uncertainty loves gold.

But gold usually takes the summer off. I thought if there was ever to be an exception, this summer would be it. Gold is a better hedge than oil against inflation.

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Ultimately, oil pays attention to its own fundamentals. For example, oil imports for the month of May dropped over 10 percent in the U.S. If other countries follow suit (that’s a big “if”), oil will drop.

Gold’s value stands apart from what is happening in any market or any country. It is the ultimate hedge against inflation or recession or wars or natural disasters or mass bailouts. All of these are on the table as practical (not just theoretical) concerns. Some are happening already.

It’s gold’s time. Its summer hiatus is over. And it’s already started to make its move up the charts. View a chart of gold movement and learn more.

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