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The Price of Gold Toilets is Rising Fast!
Fri, Sep 19 2008, 07:35 GMT
by Jack Crooks
It was probably many months ago that we came across an article about a man from China who’d furnished a castle, or palace or sorts, with items made from solid gold. The article spoke of his acquisition of the gold at low prices, the years it took to transform the gold into common household furnishings and the subsequent melting down and selling of the gold at prices far higher.
During gold’s meteoric rise to above $1,000 an ounce, the only item that he did not consider melting down and selling was what he referred to as the throne – his golden toilet.
After all, who else can claim they had a fully functioning toilet in their home made of solid gold.
But in the last few months the price of gold had been moving lower in a hurry. Until yesterday, when the safe‐haven quality that gold historically boasts came soaring in and swooped up the yellow metal. Prices went flying.
The rush of money into gold was strictly due to the lack of confidence and security in so many other asset classes that are currently going up in smoke. The evidence of credit market chaos intersected in a whirlwind of surging Libor and commercial paper rates, plummeting 3‐month T‐bill rates, widening TED and swap spreads and ongoing counterparty risk.
When all else fails, go to gold, right?
That’s what happened yesterday. And gold is extending and holding on to gains today. This week’s move changes the outlook for the metal quite a bit, as Dennis Gartman admitted in a Bloomberg article this morning. Will this lead the buck to continue correcting? It could, and it probably will justify some more dollar selling. But if you think the US dollar’s rally is over and new lows are only a matter of time, I wouldn’t jump to that conclusion just yet!
Are you hugging your gold toilet in hopes of higher prices? Or are you willing to let it go after this week’s gift to gold bugs?
Regards,
Black Swan Capital
Published on Fri, Sep 19 2008, 07:40 GMT
Archive
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Black Swan Capital LLC
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