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Gold Remains “Best Insurance For A Crisis” - Ficenec
Gold Remains “Best Insurance For A Crisis” - Ficenec
– “Future is uncertain and gold is the most effective insurance against that”
– As fears grow about outlook for global economy – long term attraction of gold remains
– As “central banks race to devalue currency,” private individuals are buying record amounts of gold
– “Gold is simply the best insurance against inflation, or deflation”
Editor’s Note: The tragic events in Paris, terrorism and war throughout the world, show geopolitical risk remains high. These risks will likely impact economies and financial markets and will see continuing safe haven demand for gold
The price of gold might be falling, but private individuals are buying record amounts of the precious metal, and as fears grow about the outlook for the global economy the long term attraction of gold remains according to John Ficenec in The Telegraph today.

UK Gold Sovereigns
The strength of the US dollar and the threat from rising interest rates have made it a tough year for gold. The yellow metal was down 9 percent last week to reach a five-year low at $1,083, and that marks a 43 percent fall from the all-time high of $1,900 reached in 2011.
However, the fundamentals, characteristics and attractions of gold are undiminished because we remain in times of extreme intervention by governments around the world and for thousands of years gold has been the best insurance during times of uncertainty.
Demand remains strong
This theory was proven in the latest report from the World Gold Council that showed bar and coin demand increase by 33 percent during the third quarter to 295.7 tonnes, led by a 70 percent year-on-year increase in Chinese investment. UK demand for owning physical bars and coins jumped 67 percent to 2.5 tonnes.
The first rule of investment is preservation of capital. The second is to go searching for gains or income that fit with your appetite for risk. Gold has been the insurance of choice for thousands of years to satisfy the first rule, despite the fact it generates no income and actually incurs costs for storage.
US Dollar weighs on gold
It is that lack of income that is driving down the price of gold at the moment. Gold’s big rival as a store of value is the US dollar.
The market expects the US Federal Reserve to increase interest rates in December, marking the first rate increase for nine years. As the returns from holding safe haven assets such as US government bonds increase then the attractions of gold are diminished.
Bad money drives out good
One of the most interesting reasons that can be linked to the falling gold price is to be found in “Gresham’s Law” that “bad money drives out good”. The Tudor financier, Sir Thomas Gresham, found that: “When a government overvalues one type of money and undervalues another, the undervalued money will leave the country or disappear from circulation into hoards, while the overvalued money will flood into circulation.”
Artificial currency devaluation is nothing new. It is as old as the pyramids themselves. Sir Thomas Gresham was merely drawing conclusions from the studies of the Islamic scholar and historian, Al-Maqrizi, who noted the effect of currency devaluation during the Mamluk empire in Egypt.
Al-Maqrizi observed the effect of a liquidity crisis on the Mamluk dynasty in the early 15th century that caused money circulation to dry up. The solution was mass enforced currency devaluation through replacing the gold-and-silver-based Dinar, with copper coinage, or Fulus, and for a period the Mamluk economy recovered rapidly as trade once again flowed freely.
However, inflation soon crept in and prices ran out of control as the currency was repeatedly debased. All the while gold hoarding was taking place behind the scenes.
Fast-forward half a century, and the money printing continues apace, while demand for physical gold is rising sharply. The latest government to devalue its currency to support the slowing economy has been China.
The People’s Bank of China is cutting interest rates and allowing the value of the Yuan to fall. Chinese citizens concerned about their loss of spending power are buying gold. Gold is simply the best insurance against inflation, or deflation.
Tight supply
The other long term support to the gold price is that when prices fall below $1,000 many miners will be forced to cut output. The gold mining industry invested millions in projects that are only profitable when prices are above those levels, and it has been absolutely hammered by falling prices.
The future is uncertain and gold is the most effective insurance against that.
Read more on the GoldCore.com blog
DAILY PRICES
Today’s Gold Prices: USD 1094.50, EUR 1020.32 and GBP 719.89 per ounce.
Friday’s Gold Prices: USD 1083.75, EUR 1006.60 and GBP 712.08 per ounce.
(LBMA AM)

Gold in EUR - 1 Year
Gold closed at $1082 even on Friday, down by $2.60 and -0.55% overall for the week. Silver also continued to lose value on Friday closing down $0.08 to $14.23 showing an overall loss of -3.46% for the week. Platinum lost $18 to $856.
Asian shares hit six-week lows as investors moved into safe haven assets, including gold and government debt. However, gold came off session highs as European shares reversed early losses.
Markets remain complacent about financial and economic risks posed by terrorism and consensus is that there will be no long-term economic impact from the tragedy in Paris on Friday.
IMPORTANT NEWS
Global risks bolster gold, oil after Paris attacks – Reuters
Gold prices up in Asia on Paris attacks, China monetary outlook – Investing.com
Gold rises on safe-haven bids after Paris attacks – Reuters
Gold Set to Rebound as Paris Terrorist Attacks Spur Haven Demand – Bloomberg
GoldCore in Marketwatch – “Close to a Bottom” – MarketWatch
IMPORTANT ANALYSIS
Gold remains the best insurance for a crisis – The Telegraph
Why Italy may need to leave the euro zone soon – The Irish Times
Time to think the unthinkable – David McWilliams
Gold, Oil, & ‘Grandmaster’ Putin’s Trap – ZeroHedge
“You can’t eat gold...You can’t eat money either” – BBC Interview WGC
Read more News & Commentary on GoldCore.com
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Should have said I am not a trader, I'm a stacker. My stack will be going to the grand kids.
I am sitting here trying to decide whether to buy a bit of silver today. I expect to see PMs take a big hit tonight so expect silver to be cheaper tomorrow AM. However, I also expect to see the kiwi dollar take a 1-2% drop overnight. What to do? What to do?
CoT says fun is just starting. Idiots were down to 65,000 long last week. Probably under 40,000 now. We'll probably turn when idiots get net negative and then we'll turn HARD. last week Nov/first week Dec. Probably $40-$50 below current levels.
I told you idiots four weeks ago to sell the bounce, told you seeing 1200 would be a gift from the gods so sell while it's over 1150 cause it won't last.
People laughed, we'll look at it now.
You want to know how much a one ounce gold coin is actually worth? It's not hard to figure out. The answer is stamped right on it; $50.
The last one I saw had £100 stamped on it..... so maybe £100 = $50 .... or not.
Okaydokay, so what`s $50 worth? 2 medium 14 packs of depends @24.99 a shot. I think I`ll take the gold thank you!
Items are worth what the market is willing to pay for the item...
I will Buy All of you oz's for 50$...
Heres' a little tid bit CA gold oz's are stamped $50CA... US gold oz'sare stamped $50 US
So is Gold worth less in Canada??? Who is kidding who... the last thing .gov's want you to know is that gold is Money!
Let's just see how much paper is worth if we decide we dont want it and we want gold instead
From the article: "Gold’s big rival as a store of value is the US dollar."
This is a joke, right?
For armchair investors who don't see the point in holding a physical commodity; yes, the $US has been a safe haven since WW2.
Remember most investors don't know anything more than Bloomberg and The Economist are willing to tell them.
This deflation cycle is going to be the grand-daddy of all deflations. The common millionaire is doomed.
dup
And yet Gold price is $13 off its intraday high. After watching this for five years now, I've come to realize it's no different than owning stock. Probably worse since I have idiots calling me weekly to buy more Gold (red flag) and i put an end those salesman letting them kniw what I think of them and the paper price. Which is the other reason I'm done with Gold. What takes days to rise $20 can be wiped out in 3 minutes flat, it's a very bad thing. I would never invest in any other venture that acted like that. Plus, Add to that my family thinks I went crazy on them , the last 3 years they have been correct and I'm done trying to get anyone to believe in it. I tried. I had best of intentions. But I'm done. Maybe this will be the blast off point for you guys, me stepping out. I was happier before owning Gold. So I guess this is my knowing the steak isn't real moment. Good Luck.
Seasmoke you obviously bought gold for the wrong reasons... and saying that people who try to sell gold make gold a scam is bad logic.. pretty sure drug dealers are allowed to do drugs too
Seasmoke, I'm almost where you are but haven't made it yet. I'm holding out until (if) the U.S. dollar is finally seen for what it is - based on a money printing machine with less value every day - and comes crashing down. It seems that China and other countries are setting up for gold to be the standard, or a big player. I'll hang in for about one to two more years.
Gold is the omega hedge, the value it carries today is the price of paper in the casino. PM's aren't magic, though a lot of people treat it that way. It's a long term bet on human nature......
Well ..... I sure hope you are not buying gold from telemarketers - Unless you are okay with paying the 30% to %50 premiums. The telemarketers don't have my number, as I buy locally and price check premiums. Lucky to have several good shops close to me. This is at least ONE positive feature living in the dense urban population. Now I am trying hard to think of reason two.
Stopped on one of the smaller home shopping channels last night. They were selling random date Saint Gaudens MS65's at $500 over the price Apmex charges. The host made it sound like they were giving the coins away at never to be seen again prices.
I give the telemarketers fake BitCoin numbers for gold. Great return on investment.
Its meant to be this way.. They are trying to break you or to change the way society thinks.... They want to free up as much gold as they can so they can scoop it up? Its a long run and if you can see that we live on a finite planet things are obvious. Trust what you know. Ive been into gold for only the past year the market pointed me towards gold because everything is B.S. or Fantasy in the land of OZ. W/O QE we would be in a very different place. Just when you puke and think gold is done, its getting close. Gold will never be done and it never has been done. Gold wont go to zero it will always have value as a medium of exchange. Just live your life, but still remember what you know dont give up. I cant talk to certain people in my family about it either, it will always be that way. Until possibly the day comes when its not. When scum bags take over its not always easy for everyone to see, but remember its real and reality has a way of coming back into focus always.
COMEX paper gold promises could 'go to zero' though - very easily.