Gold Prices
SPDR GOLD TRUST ETF
NYSE: GLD
May 17
no chart
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Last price131.07Prev Close134.09
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Change-3.02% Change-2.3%
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Open133.17Volume20,346,500
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Day Low131.02Day High133.48
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Bid131.22Ask131.23
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52 Wk Low131.0752 Wk High173.61
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Market Cap509,153ExchangeNYSE
Today
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Investing in Gold: Why the "Golden Cross" is a Big Deal
Investing in gold and silver already offered staggering profit potential, and the opportunities just got even brighter.
Gold this week reached a "golden cross" and silver is perched to traverse one in a matter a days, following successive weeks of bullish trends in both precious metals' markets.
A golden cross occurs when the current price of a commodity (or an equity) and the shorter term moving averages "cross" or rise above the longer term 200-day moving average.
After 18 months of tepid and sometimes lower price movement, gold and silver have formed a large foundational base while enjoying two of the longest and strongest bull markets in history, according to research from Business Insider.
Now the golden cross has delivered technical support for higher moves for both metals.
"We're going to see new highs in both gold and silver in the first half of the New Year," said Money Morning Global Resources Specialist Peter Krauth. "I don't see anything that will keep this from happening."
Here's why Krauth is so bullish on gold and silver.
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Gold Bugs Love It, But a New Gold Standard is Just a Dream –For Now
Thanks largely to Ron Paul, the Republicans have suddenly become enamored of gold.
And why not?...It is real money.
These newly-born gold bugs have even gone so far as to include a call for a commission to examine a return to the gold standard in the party platform.
Needless to say, we've come a long way since President Richard Nixon "closed the gold window" in 1971. Forty-one years, and a few financial disasters later, the debate has begun anew.
But it begs the question: How would the gold standard work?
What's more, what would the economic implications be, and is it likely to happen or is it all just a gold bug's dream?
In ancient and medieval times the answers were quite a bit more simple. Since there was no real banking system, there was also no argument.
Kings coined money with gold, silver, or copper, and the people accepted the money at a price based on its metal content. The idea of taking paper instead would have been thought of as sheer madness.
Only in China, an isolated and stable society, was paper money used during the Song Dynasty of the 10th through 13th centuries, but even there the Mongol invasion and fall of the Song regime caused the paper money system to collapse.
Paper money backed by gold only became possible once modern banking got going in Europe in the 16th and 17th centuries.
In fact, the British Gold Standard was devised in 1717 by no less than Isaac Newton, then Master of the Mint. Other countries soon joined Britain in linking their currencies to gold, including the United States from 1878 until its abandonment in 1933.
Of course, countries claimed to be on a gold standard under the Bretton Woods Agreement from 1944-71, but gold was only exchangeable between governments. Indeed, holding gold was prohibited in the U.S. for private individuals.
But inevitably, the Bretton Woods monetary system itself became manipulated and collapsed in inflation.
That brings us to today....
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Gold Prices Jump Above $1,700, but Hurdle Ahead
Gold prices have made the most out of a short trading week, and today jumped $10.50 to $1,704.50 an ounce at the Comex division of the New York Mercantile Exchange.
Gold, which one year ago today hit a historic high of $1,920 an ounce, came out roaring Tuesday after the Labor Day holiday. Gold closed up 2.55% to reach a more than five-month high of $1,700.
This came from increased investor hopes that the U.S. Federal Reserve will deliver QE3 to give the slowly-recovering economy a much-needed lift.
U.S. Fed Chairman Ben Bernanke's remarks from Friday's Jackson Hole, WY speech served as the gold price catalyst.
"Taking due account of the uncertainties and limits of its policy tools, the Federal Reserve will provide additional policy accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability," said Bernanke, giving enough of a hint that QE3 was on the way in 2012.
Gold ETFs also started strong in September after a healthy performance in August.
On Tuesday, SPDR Gold Trust (ETF) (NYSE: GLD) holdings, the world's largest gold-backed ETF, increased to 1,293.138 tons. This is the highest level since mid-March.
GLD's price also jumped 1.77% to 163.36.
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Gold Prices Await Big News from Bernanke
Gold prices are desperately waiting for bullish news from the Federal Reserve this week after slipping from last week's gains.
Last week, gold woke up from its sleepy August and increased 3.5%. It saw its greatest one-week jump since January and gold exchange-traded funds (ETFs) followed in its footsteps by reaching four-month highs and breaking 200-day moving averages.
These jumps came in response to the Federal Open Market Committee (FOMC) meeting minutes that suggested the need for more stimulus and some sort of quantitative easing. The report release extended the recent precious metals rally initiated by European Central Bank President Mario Draghi, who pledged his commitment to keep the Eurozone in place.
Gold prices on Monday fell from last week's high of $1,674.28 to $1,671.80, and have continued that decline this week. The most actively traded contract for December delivery was down Thursday morning by $1.10, or 0.1%, to $1,661.90 per ounce.
So what happened to dampen last week's enthusiasm for gold?Europe, China Pound Gold Prices
News from abroad knocked down some of the gold price optimism.
Germany's Ifo Institute announced Monday that its business sentiment declined for a fourth consecutive month in August to 102.3; this came in lower than the 102.6 estimates and July's revised 103.2 figure.
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Republicans Support Return to Gold Standard
Five years of liberal monetary policy have made the rarely considered notion of a return to the gold standard a genuine issue on the Republican platform.
The Republican Party is set to announce a "gold commission" to its official policy platform in Tampa Bay this week. The move will mark the first time in three decades that the gold standard has returned to mainstream U.S. politics.
A committee spokeswoman confirmed to CNNMoney that the new proposal to support "gold as money" will be officially decided upon at the RNC Convention.
"Now, three decades later, as we face the task of cleaning up the wreckage of the current Administration's policies, we propose a similar commission to investigate possible ways to set a fixed value for the dollar," reads the proposal.
Republicans' Gold Standard Proposal: A Nod to Ron Paul?
The draft calls for an audit of Federal Reserve monetary policy and a commission to explore restoring the connection between the U.S. dollar and gold.
Many credit the eyebrow-raising move to Texas Rep. Ron Paul, a longshot GOP presidential hopeful who has been a staunch advocate of returning to the gold standard. Paul, the token underdog in the race, does have a stream of loyal supporters who would support such a move.
But Marsha Blackburn, a Republican congresswoman from Tennessee and co-chair of the committee, shrugs off any connection to Paul and his coveted delegates.
"These were adopted because they are things that Republicans agree on. The House recently passed a bill on this, and this is something that we think needs to be done," Blackburn told the Financial Times.
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