COMEX gold prices hit all-time record high of $1045 per ounce

Gold's rally to a record high shows commodity investors remain concerned that the US economic recovery will spur inflation, even as Wall Street forecasts and government bonds suggest stable prices. COMEX gold prices have jumped 18% this year after gold futures touched a record $1,045 an ounce yesterday [6 Oct 2009] amid increasing demand for a hedge against inflation and a weaker USD. Demand for gold is increasing as US government debt reaches record levels and the Federal Reserve keeps interest rates near 0%.

Gold prices have more than tripled in the past 8 years as the dollar tumbled 67% versus the euro. Gold is appreciating along with other assets, from commodities to stocks. The S&P 500 gained 17% this year, and the CRB Index of 19 commodities gained 13%, including a 97% jump in copper, a 60% rally in crude oil prices and a doubling of sugar prices.

- Like I've said before (here and on the forums), vertical or near-vertical rises make me nervous and this is certainly no exception. *Something* is happening but, like I posted, the billion-dollar question is *what*.

Short list :

* USDX making a double-top from 77 marking a trend reversal
* Israel-Iran conflict possibly heating up (should be bullish for oil too, obviously)
* Rumours of oil producers shunning USD, promptly officially denied of course
* Rumours of an ongoing economic recovery (yeah ... right ...)

Meanwhile, with last year's record price around $1030 officially blown away, we can now take a look at the technicals. If this level holds, it will mark a major breakthrough of the critical $1030 resistance level, forming good support over 2 points within a roughly 1-year period. It looks like the probability of a double-top is getting reduced slowly the longer prices hold above $1030. But let's remember not to get ahead of ourselves - a technical pattern is not a pattern until it is *completed*. Gold prices will have to test $1030 over the next few weeks and only upon succesful tests can we come to an intermediate-term conclusion.

(2009-10-07 12:18:11 SGT) [Biz] Permalink

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