Having been an occasional visitor to HPC, I, like most bears, want to protect my hard earned money. Gold seems to be the obvious answer, but looking at the historical gold chart, there seems to have been a similar rise in gold prices over the same period during which we have seen the phenomenal bubbles created in other asset markets.

In my simple terms, why won't gold crash in the same way that we are predicting house prices and other asset classes to crash, given the current economic climate?

Any help greatly appreciated.

Two words: 'Peak Gold'

Asian Times

CAT HERDER
I would forget previous charts as the world is a completely different place. things have changed which have created the rise in price.
According to the world gold council, demand hit a record of $65bn at the same time production fell by 13%. India the worlds largest gold market,showed record demand for gold for both investment and jewellery, according to independant consultancy GFMS ltd. The countrys total demand hit 317 tonnes in the quarter -equal to half the global mine output for the period . Meanwhile Russian consumption for the 1/4 rose 27% to 20.3 tonnes , and in the Middle East, tonnage demand rose 20%to 97.5 tonnes.
So nothing complicated about it, just supply and demand. The worst scenario would be a mining company discover 300 gazillion tons of the stuff causing gold to loose its rarity. doubt if thats going to happen.

Wouldn't listening to the World Gold Council be a bit like listening to a spokesperson from Nationwide talking about house prices? Vested interest perhaps?!

Further to what I said previously, read this from GATA (sure a VI Gold Bull but it still does makes interesting reading). They believe that, allowing for demand and supply to stay constant, the remaining gold reserves held by official central banks in their vaults will practically disappear between 4 to 7 years from now.



Read the rest of it here

Bumping my last post for the newcomers to the gold party: just so you know why this is only the beginning.