Friday, November 02, 2007

$800 Gold, No Headlines

2 November 2007

My wife Susan and I watched as gold crossed over from $799 to $800 per ounce at midday today. Gold has previously traded above $800.00 on only two days in January 1980.

As this is a historic milestone, I immediately checked the news services for the headlines trumpeting $800 gold. I looked all over's news feeds. Nothing.

In all fairness, both
Bloomberg and Reuters UK carried stories, posted at 1:50 and 2:16 pm. Eastern time respectively. Marketwatch picked up the story at 3:21 p.m., and this briefly surfaced on Yahoo’s specialty Marketwatch section for about half an hour before disappearing again. This story didn't make the top ten in either Yahoo business or Canadian business news, let alone “Top Stories” or “World News.” I had to go to Kitco (a specialty precious metals investing site) to find the Reuters and Bloomberg versions of the story.

What does this tell me?

Gold is going much higher than $800.00 this time around. This gold bull market won't slow until virtually everyone has noticed. And it appears that this development will be many years in the future.

At the present juncture in history, gold’s trading in all-time record high territory is news only for those with a special interest in its coverage.

Gold did trade briefly at $887.50 on January 21, 1980 before collapsing in the 21-year bear market that took it to its dismal February 20, 2001 low at $255.00.

Now let’s see if anyone notices when gold reaches $875.00 per ounce.

By the way, on February 20, 2001, the US dollar index traded at .4424 times the price of gold. On October 31, 2007, this same ratio stood at .0961. That is, the US dollar index has lost 77.3% of its value against gold during the relatively short interval from February 20, 2001 to October 31, 2007 (a brief 6-1/2 year period).

My advice – don't let the news pass you by any longer. If you have not already done so, do consider investing in gold in the near future. (By the way, I am not a registered investment adviser, and I can offer no predictions about short-term trends in the gold price, which is very volatile.)

Haven't I suggested investing in gold on this blogsite before – on July 28, 2005, when gold was trading at $425 per ounce?

Susan and I purchased our first gold mining stocks (Northgate Minerals and Bema Gold Corporation) on August 26, 2003. On that date, gold was trading at a price of $362.00 per
ounce. Now, 4 years later, gold has gained $444 in added value, in US dollar terms. That is a 123% gain over this period (though the gain is much more modest in Canadian dollar terms, due to the soaring international value of the Canadian Loonie).

With a closing price today of $806.00, the price of gold is still attracting little notice in the mainstream media.

Figure it out – it’s still not too late to be an owner of gold!

I'll meet you here again when gold tops $887.50 per ounce, and moves into all-time record territory. And we'll again examine the headlines on that day. My best guess – our next meeting will be only a few short months away.

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