Auguries - September 28
Fear of a Gold Planet
Kevin Michael Grace
Gold was up (at press time) $8.60 (+0.5%) for the week to $1,779.60, and silver was up $0.02 to $34.71. Gold rose $26 (+1.5%) Thursday, a development Reuters attributed to “hopes for additional monetary stimulus from China and fresh austerity steps in Spain, which renewed fears about the Eurozone.”
Bloomberg’s explanation was somewhat different in emphasis: “Concern that central banks’ moves to boost economies will devalue currencies, spurring demand for the metal as an alternative investment.”
Reuters has long discerned a causal connection between the fate of the Euro and the price of gold. At first, Reuters claimed that a strong Euro means stronger gold; now it claims that a weak Eurozone means stronger gold. This cognitive dissonance demonstrates that the fate of gold has nothing to do with the fate of the Euro. It does, however, have everything to do with the fate of central planning.
Read more about gold prices here.
