Even though U.S. markets are closed for the holiday the euro rebounded in overseas trading, putting upward pressure on commodities.
Gold closed out trading Wednesday down $1.40 to $1,729.30 and silver was down $0.09 to $33.29 for a silver/gold ratio of 51.9. If it seems strange that gold prices are “down” but higher than yesterday, that’s because of the way the global spot market works.
Gold prices have seen strong support from accumulation by central banks on concerns over currency valuations. That trend is likely to continue as long as currency manipulation is a tool for countries competing for manufacturing jobs in the global marketplace; in other words, forever.
I know it concerns people that the U.S. is no longer watching the currency manipulation follies from the sidelines, but it’s either play the currency game or experience another round of companies shipping jobs overseas. Would you rather have a dollar that’s a shining beacon of strength in the world market or have a job? That’s the choice we face in the modern economic world.
Your hedge against fluctuating currency values is holding a percentage of your wealth in gold, silver or another hard asset that will maintain relative value in relation to the purchasing power of the computer blips in your bank account. Another advantage of precious metals is that it’s one of the few investments still free of bank and investment house trading.
There’s a reason your stock broker doesn’t recommend precious metals and that reason is there’s no margin in it for them. Ironically the trading house they’re working for likely uses commodity derivatives as hedges for some of their riskier trading bets. If it’s good enough for them, it’s good enough for me.
Another great aspect to gold and silver is that they are two of the few forms of real money you can buy without handing over your social security number or reporting it to the government. Most of you know I don’t subscribe to every wind of conspiracy theory, but it’s still nice to have one area of my life that’s none of the government’s business.
That there are still investments we can make without excessive scrutiny is definitely something we can take a moment to be thankful for this holiday season.
Chris Poindexter, Senior Writer, National Gold Group, Inc