I try to keep my political and religious opinions out of this bog as much as I can for the reason that gold is the money of ALL common people. However, I must say again that it is silly to think that a small minority, fanatic group – so called terrorist or self destructing regimes in specific countries can control the price of gold (the forex of nature). More then this, it is very possible to think that terror attacks have just the opposite affect on the price of gold. That is: terror = declining price of gold. Like wise growth and economic prosperity will probably bring higher gold prices.
Gold is first of all a chemical element in the periodic table and that a scientific fact. Since gold like any other commodity offer nothing but price appreciation or relatively independent store of value – It is very hard to buy it when it price decline and 77% of the market comments are bearish.
If I have to guess, what are the reasons for the sharp decline that brought the price of gold back to its 2005 high level?
This is what my instinct tells me: The gold market needed a good washout in order to get rid of the short term virtual gold speculators which trade somewhat false paper promises based on geo-politics, fears and other psychology related opinions.
Technically the four month trend lines broke down and nominally you can almost buy gold now at last year price, isn't it wonderful?
Click on the chart below to enlarge:
Meaningless to the gold market , meaningful for Ghana:
Ghana 2005 gold output up 20%
Accra - Gold production in Ghana rose 20% last year to 2.15 million ounces as established companies raised production and new mines came on line, figures from the Ghana chamber of mines showed on Wednesday.
Gold producers' revenues from Ghana, Africa's second biggest gold producer after South Africa, rose 24% to $903.9m in the same year, the chamber said, reflecting a rise in prices of the precious metal to near 25-year highs.
