this article is by adam hamilton, who comments that strong demand for physical gold, combined with the fed's recent action will lead to a strong upleg in gold:

After gold’s breathtaking $38 surge in 15 minutes Wednesday, there is much renewed interest in the Ancient Metal of Kings. The Federal Reserve, which is clearly being run by lunatics, publicly announced it is going to create over a trillion dollars out of thin air to monetize US debt. This degree of pure monetary inflation is utterly unprecedented.

Gold soared because it remains the best asset to own in inflationary times. Inflation is an immoral stealth tax levied on everyone. But it hits those of modest means the hardest, because rising everyday living expenses consume a higher proportion of their incomes. When the Fed injects fiat money into the economy, relatively more dollars chasing relatively fewer goods and services bid up prices on everything.

But gold always stays ahead of the rising inflationary tide. New mining only adds 1% to 2% to the global above-ground gold supply annually. Yet even before this week’s monetization announcement, the Fed grew the US monetary base by an astounding and frightening 88.1% over the past year. With vastly more dollars bidding on relatively far less gold, a rising gold price is the inevitable result of this inflation.

The prospect of unbridled monetary inflation rightly terrifies investors. Mountains of cash, the highest relative and absolute levels ever, languish in money-market funds earnings zero interest today due to the Fed’s interest-rate manipulations. As monetary inflation accelerates, this capital will suffer increasing real losses of purchasing power. So the natural defense against this central-bank predation is to move capital into gold.

http://news.goldseek.com/Zealllc/123...