Commodities were flat to slightly lower midweek as the dollar continued its bullish ways against the euro and Asian currencies.
In early trading gold was down $0.93 to $1,761.70 and silver was down a penny to $33.77, lowering the silver/gold ratio of 52.1.
I’m still not prepared to throw in the towel on my prediction for this week quite yet, but it’s starting to look like $1,800 may be a bridge too far in the time we have left. As long as the dollar stays on its bull run against other major currencies, gold is facing an uphill climb.
Commodities were mostly lower on the strength of the dollar and renewed concerns over global demand. Gold and silver had plenty of company in the price doldrums with copper, crude oil, platinum and palladium all moving lower.
Yesterday I got a lesson in how primitive our banking system still is in many ways when I tried to make a small cash transfer between one of my accounts at a credit union on the west coast and a bank account on the east coast. If you have three days it’s no problem, if you need cash the same day it turned out my only option was spending $40 for a wire transfer.
In this modern age of internet communications banks can’t send money directly to one another, it all has to go through the Federal Reserve system. So my simple wire transfer, from one account in my name to another account in my name, had to ping-pong through no less than six Federal Reserve districts.
It’s bad enough we have to accept fiat currency backed by nothing but the government’s promise to pay, but then to be chained to a system for moving it around that was designed a hundred years ago was an eye-opening reminder that our system of currency really is shockingly primitive.
The idea of keeping some of your wealth in easily divisible silver and gold may seem quaint to some people, but how much faith should we have in a currency system designed the same year Brillo pads were invented and mass transportation depended on trains that ran on steam?
Maybe it’s time we considered dragging our system of currency, kicking and screaming if necessary, into the modern world. In the meantime, keep at least part of your wealth in the only real money that’s left.
Chris Poindexter, Senior Writer, National Gold Group, Inc