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Gold Spikes To All Time Highs Amid Massive Printing Of Currencies And Worry

|Includes: AUY, SPDR Gold Trust ETF (GLD), GOLD

The SPDR Gold Trust (NYSE:GLD) gapped higher today on the back of continued fears of massive global currency devaluation.  Before 10am ET, the GLD took out the all time highs, hitting a price of $119.34.  It is hard to imagine how gold will fall sharply in the coming months and years.  Fear drives it higher, Europe printing a trillion dollars to bailout countries drives it higher, and the United States printing just as much if not more does the same.

The U.S. Dollar has soared recently, mostly because the Euro has been hammered. A rising dollar usually drops the price of gold while a falling dollar usually spikes gold. That has not been the case this time. At some point the dollar will pull back and that could drive gold even higher or at least keep it from falling back sharply.  While small pull backs will occur, it is hard to imagine how gold could see an extended drop and not continue to make new highs.

Gold stocks are responding today with a big move higher.  Yamana Gold Inc. (NYSE:AUY) is near the highs of the day at $11.38 +0.69 (6.45%). Randgold Resources Ltd. (NASDAQ:GOLD) is jumping higher $87.49 +5.09 (6.18%)

Gold stocks may be the one bright spot in this market right now.  What could make gold fall?  In the long run, it does not seem anything can. However, in the short run, if the fears in Europe subside, and we have a quiet period without any big default news or problems, gold could see a pull back.

Gareth Soloway
Chief Market Strategist