Now you may or may not follow gold stocks. But if you do, you may recall the recent jump we’ve seen.
On 14th January this year, one of the biggest ‘battles’ in the long running worldwide currency wars broke out. It took most investors by surprise.
What most people don’t realise, is that the value of paper money has already collapsed. The US dollar has lost 98.3% of its value since 1920.
Governments and central banks may try to take private gold again. They hate gold because it gives individuals a way to protect against the devaluation of paper money — inflation.
Gold is trading around US$1,085 per ounce. That’s a five-year low, down over 40% from its all-time high in August 2011, and down over 8% this year alone.
The spot gold price crashed on Monday. This had a huge impact on several Aussie gold miners. But not all gold miners have been affected equally.
After six years of saying nothing about how much gold it owns, China told the world. But it wasn’t the news everyone expected.
Since February the US dollar gold price has not changed. And neither have many of the gold mining companies’ share prices.
Investors have long understood that gold is an excellent hedge against inflation. The analysis is straightforward.
Here’s the problem: If you took the lid off gold, ended the gold price manipulation and let gold find its level, China would be left in the dust...