Gold Hits Record High!
Gold just broke the previous intraday record and touched $1,043 per ounce. It’s currently trading around $1,038.
This spike may have been caused by a news report that appeared in the Independent today. It states that the Arab States in the Gulf have made secret plans with China, Russia, Brazil and France to stop using the US dollar for oil trading. While this isn’t immediate and it calls for a transition to occur by 2018, it seems to have set the stage for a pretty bad precedent – that gold will jump on these sort of rumors! Lets see if we get any official confirmation of this “news”.
So is this the beginning of the end for the US Dollar? I hope not, but I’m buying some silver and maybe some more gold, just to be safe!
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October 6th, 2009 at 11:02 pm
good call on it. I remember back in December or some months back you were bullish on gold and we all doubted you. I have to say I am an idiot on that. Good call.
October 7th, 2009 at 4:37 pm
For future refrences, It’s called the Persian Gulf, not the Gulf.
October 10th, 2009 at 1:32 pm
How does gold fit in with your “living off dividends” philosophy?
And for the record, gold has lost ground against the dollar this year… the Australian dollar.
I own a bit of gold that I bought in February; it’s up something like 18% since that day. The very same day I took a large position in Australian dollars and used it to buy BHP Billiton shares directly on the Australian exchange (because ADR shares are a rip-off). The Australian dollar has gained around 41% against the US dollar since then– leaving gold in the dust. Oh, and the BHP Billiton shares are, in Australian dollar terms, up by around 21%, so multiply 1.41 x 1.21 and that’s around a 70.6% gain vs. the US dollar… and that’s before you even count the sustainable Australian-dollar dividend that BHP pays… and after all, I thought we’re trying to “live off dividends” here, no?
One more thing re: gold: I would suggest that the real issue in gold’s recent rise is simply that the USD is tanking. The recent news is that in nominal USD terms gold has reached a record high… but gold is actually 30% off its high against the AUD, and I think about 7-8% off its high vs. the Euro.
One can, indeed, hedge against USD weakness while outperforming gold and while staying true to the “living off dividends” philosophy.
October 25th, 2009 at 4:08 am
Hey there, hows your online income goin? Looking forward to reading another update.