-- Posted Monday, 6 October 2008 | Digg This Article | Source: GoldSeek.com
Gold’s ultimate status as a money and a safe haven asset is showing its luster again today as the financial crisis escalates. Fiat money is flowing into gold as uncertainty and fear rocket to new heights. Volatility remains high across all markets and precious metals are not immune. This signals extreme fear across the globe and general sentiment is now quite harmonious in that things are set to get worse. I am expecting more aggressive monetary growth in the coming weeks and months. This will further debase the value and integrity of fiat currencies and capital looking to preserve its purchasing power will find safety in gold and silver. The relative value of currencies are immaterial at this point with only gold as the true barometer of the illness within the global fiat currency system.
Physical demand has been unprecedented in recent weeks. Large premiums over spot prices with shortages of all kinds of bullion products being reported. Example, 100 ounce COMEX silver bars are being sold at $3+ above spot price where months ago the premiums was around $1/2 per ounce. US Silver Eagles are demanding $4-$6+ premiums over spot, months ago they would have commanded a $2 or so premium. Gold Eagles are going for $70 or more over the paper spot market price. This is the true market in the end and I do not believe in the full integrity of the gold/silver's paper markets' pricing mechanism at this time. I fully expect large price swings (extreme volatility), but the overall trend in the coming months will be to the upside.
Gold and silver stocks continue to get battered with valuations becoming incredibly attractive. They are down with the general markets but in the near future I fully expect a vicious reversal in the precious metals stock sector. Gold and silver investments will attract the ever growing flight of capital out of general markets and investments. Short-term downside risks still do remain despite some incredible mid to long term prospects for mining stocks.
I end today's comments by revisiting Dr. Bernanke’s remarks from late 2002 that the private central bank might consider "unconventional measures" to stave off deflationary pressures. Get ready for these unconventional means to reach new levels at this time as a more aggressive monetization of debt is about to ensue.
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- Peter Spina, GoldSeek.com
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-- Posted Monday, 6 October 2008 | Digg This Article | Source: GoldSeek.com
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Peter Spina's experience with the precious metal markets started back in the mid-1990s, which led to the creation of GoldSeek.com back in 1995. Today GoldSeek.com ranks in the top three most popular global gold websites and its sister site, SilverSeek.com ranks as the most visited silver website in the world. Back at the start of the new secular precious metals bull market, Peter established the technically-focused subscription newsletter, Gold Seeker Report, which at the start of 2005 was merged into the more comprehensive Gold Forecaster (goldforecaster.com) service. In addition to the newsletter and websites, Peter frequently appears in the media including MarketWatch, Reuters, and theStreet.com
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Gold Market Comments - October 6, 2008
