There is a lot of controversy stirring up with regard to what could be the “largest fraud in history”, as gold available for delivery to people who think they actually own metal through paper intermediaries is being exposed as being only as safe as the entities that guarantee its delivery — in other words, not safe at all.
This is putting a scare into people who think that owning gold is as easy as buying GLD and resting easy with the mindset that everything is a price play in the grand casino. While I guess I have not parroted this often of late, the word in these pages always has been “gold – real gold – is not about price, it is about value”.
The United States remains a high functioning bankrupt entity, as are many other developed nations. These nations are going ‘all in’ in a game with only one outcome – an end to the system – with only the timing in question. It appears that gold’s four month long correction is being arrested while the dynamics currently in play could easily send gold through the intermediate target of 1300 USD, to the longer term target of 2,200 and beyond.
Ah, but here in biiwii land we are never about hype and over-frothed excitement, now are we? Nor are we about price. What we are about is risk and reward, insurance and remaining on the opposite side from panicked herds.
Take a look at recent history; economic blow up leading to off-the-scale inflationary monetary policies have led to the appearance of economic recovery. Wall Street and the mainstream financial media are puffing out their feathers in all their conventional splendor. The price casino is open once again to the public.
Gold lived up to its true utility in the financial panic as its VALUE – or real price – soared (to intermediate term unsustainable levels) in relation to all other assets as the casino emptied amid the flames. Enter the Wizard and his inflate-o-matic monetary policy and the resultant economic rebound as the price of gold took the correction in relation to many of the gamed assets. People who understand value in a monetary world gone mad, just yawned. Casino patrons however, well… it is called a herd for a reason.
Meanwhile, there’s real gold; so misunderstood, so boring… but seemingly about to get much less so. For its part, the daily chart projects to around 1225, but who cares? It’s just a price. Of more importance is its relational value to things like the stock market, in which so many people have put their faith once again.