Thread: Gold Futures Slip as Euro Falls

Gold Futures Slip as Euro Falls

By MATT WHITTAKER

NEW YORK—Gold futures retreated in the face of a strengthening U.S. dollar.

The most actively traded gold contract, for December delivery, fell $7.70, or 0.6%, to settle at $1,346.70 a troy ounce on the Comex division of the New York Mercantile exchange.

"People are taking profits in gold given the magnitude of the gains," said Stephen Platt, analyst with Archer Financial Services in Chicago.

Guggenheim Partners's Scott Minerd discusses why he thinks that despite record highs, gold can be expected to rise even higher.
..The metal has recently hit a string of records as the dollar has weakened ahead widely anticipated monetary easing by the Federal Reserve. Expectations of this so-called quantitative easing, which could include the purchase of Treasurys, have been a strong support of gold as a currency and inflation hedge, helping send the metal to a record $1,366 last week.

But on Tuesday the dollar advanced against the euro on growing sentiment that the greenback's broad decline had gathered too much steam because of speculation about additional stimulus measures from the Federal Reserve.

A stronger dollar can weigh on demand for dollar-denominated gold by making the metal more expensive for buyers using other currencies. Shortly after gold closed, the ICE Futures U.S. Dollar Index was up 0.2%.

"That certainly seems to be keeping a lid on (gold) right now," said Craig Ross, vice president of Chicago-based brokerage ApexFutures.com.

http://online.wsj.com/article/SB1000142 ... 65914.html

One of the reasons given to go towards a fiat dollar was that gold and silver were both commodities, and as such will trade on the open market as commodities do in a given "free" market, due to supply and demand.

Now that gold has been de-coupled from the dollar, the fiat dollar trades on the "free" market according to supply and demand, and gold is sought as a safe haven.

We better keep the Bush Tax Cuts; we will just have to watch the other hidden tax increase coming our way......inflation.

I wonder if the Bush Tax Cuts will out weigh the inflation?

If goods and services go up due to inflation, and they are taxed by a percentage of the total cost, then the tax collected goes up as well?