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Gold/Mining/Energy : Gold Price Monitor

GDXJ 97.80

+0.9%

Nov 19 4:00 PM EST

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To: James R. Barrett who wrote (14672)	7/19/1998 12:59:00 PM
From: PaulM	Read Replies (1) of 116764

(Commodity) Markets Fear Slowing U.S. Growth afr.com.au About oil, aluminum, copper as inflation hedges, doesn't it seem the deflationary writing is on the the wall anyway? Gold has traditionally diverged from the rest of the crb during serious deflations because it remains a liquid saving/trading vehicle that doesn't default. Like cash. It is rare enough in relation to other things that it can serve as a store of value, whereas you'd need too much copper, oil or aluminum to store an equivalent amount of wealth. Gold has many essential uses--perhaps many more than the other metals you suggested--except that its priced (even now) at many hundreds (perhaps thousands?) of times their price by weight. Gold has never traded at its industrial oprice because of its use in jewelery and the unique monetary properties noted above. The only possibility of inflation that I can see--which I wouldn't rule out at all--is that the dollar becomes subject to a currency (or bond) crisis like the ones we've been seeing in lesser economies. If we see a dollar devaluation, it by extension means all the world's reserves are devalued as well.

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