Gold is kaput!
The statement says it all but for those who like their t's crossed and their i's dotted, I offer the following.
It is clear, or at least it should be by now, that gold is finished as a hedge against anything, including economic turmoil. It's also clear that the commodity, having been demonitized, is now merely an industrial commodity. It doesn't pay interest, it has no practical use other than the traditional ancient usages, you can't eat it and it no longer even holds any sort of magical allure.
It will continue to be used to make jewelry, coins, Olympic medals, china, pens and other assorted objects of affection but as a backing for currency or a safe haven from the ills of the world, gold is no longer, and will more than likely never again be, a metal to protect your wealth.
This is now quite clear and the news that the IMF wants to sell its reserves to raise cash illustrates the dilemma facing gold. Gold bugs want the price to go up but every time it does, it becomes an opportunity to liquidate was has become an antiquated repository of wealth. Today people want to sell their gold to turn it into something of value, a sort of reverse alchemy. |
