Price of Gold in Dollars (Record High), Euros (-10%) and Yen (-10%)

The price of gold closed at record highs today exceeding $1,040 per ounce throughout the day. While gold is at record highs in dollar terms, the commodity is still down 10% from its highs when priced in Euros and Yen. As shown in the charts, the price of gold is up considerably over the last five years, but the recent run has only been strong in dollar terms. This indicates that the strength is solely a function of a weaker dollar rather than any real pickup demand.

click to enlarge

Comments

[Macro_Man:]

Is this a sign of weakness for Gold..in the sense that it reflects more USD weakness than a relatively stronger demand for gold. So, when the dollar strengthens, Gold goes down

Oct 06 03:09 PM

[twitee:]

All other currencies will eventually drop (specially Euro and British pound) as the effect of the worldwide stimulus diminishing.....Dollar will improve against Euro..Meanwhile stick with gold

Oct 06 04:40 PM

[Earthizen:]

Thanks to Mr. Bernanke, dollar is down, all other assets are up! Asset reflation is working!

Oct 06 05:09 PM

[Mad Hedge F...:]

unj Of course you knew it was going to happen like this. After churning around just below the old high, and sucking in as many profit takers and short sellers as possible, gold blasted through to a new high for the year of $1,038. Never mind that the triggering event is complete balderdash, a story in Britain’s Independent newspaper asserting that the Middle East is holding secret global talks to price crude in the yellow metal or other currencies (click here for story at www.independent.co.uk/... ). It didn’t hurt that Australia cut its interest rates by 0.25%, the first G-20 country to do so. There probably isn’t enough gold in the world to finance more than a few weeks of global oil production. Total gold holdings would only fill two Olympic sized swimming pools. But never let the truth get in the way of a good trade. The confirming moves couldn’t be more ubiquitous, with the Canadian, New Zealand, and Australian dollars all up big, commodities strong, and silver also going ballistic. Regular readers will all recognize these as old friends of mine, core longs that I have been strongly recommending since the beginning of the year. I have been trying to get investors into gold since it was at $800. If you aren’t in gold by now, I can only tear my own clothes and flagellate myself for my abject failure to convince you of gold’s merits. US government debt is exploding, and with foreigners holding a large part of our paper, the only way to get out of this mess is to devalue the dollar. It’s like Obama invited China’s president Hu Jintao to dinner at an expensive Upper East Side restaurant, fakes a sudden case of food poisoning, leaving him with a big fat bill. Next stop $1,200, then $1,500, then the old inflation adjusted high of $2,400.

Oct 06 11:18 PM

[texpat:]

"This indicates that the strength [in gold] is solely a function of a weaker dollar rather than any real pickup demand."

Duh. The big picture is clearly a bull market when measured against any currency. What are you guys, day traders?

Oct 07 09:07 AM