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Message: Gold prices should'nt explose it's no good for anyone

Gold prices should'nt explose it's no good for anyone

posted on May 23, 2009 11:00AM

If gold were to soar too fast it could trigger panic among investors who would retreat from the markets and be weary of US dollar and many negative consequences would ensue to the economy, maybe the one big looser would be in treasury ,and Central banks would then have to lift interest rates faster then expected to attract money in treasury causing further contraction of the economy at a time it starts lifting it's head .

So maybe it's not so surprising German central bank and IMF were seen helping out DeutshBank last month and mayber other central banks are " in " keeping gold relatively low by helping commercial banks in their " fixing " of gold pricing .

Maybe China is also acting with caution in it's buying gold in order to keep prices low and US dollar strong .

Maybe the whole thing is not fixed but so many big players have converging interest in keeping gold low and US dollar relatively strong that they act in a sort a mutual interest behavioral pattern which has the same consequences as if they acted in mutual agreement . We can think of other circumstances in the past where such things occured !

If money were to run for shelter out of fear it could be disastrous , even though gold prices would soar, the rest of the world would suffer greatly , i think the best thing is for gold to climb up slowly and relatively steadily and i think that's what's happening now because central banks are juggling as best they can with an explosive situation . So the perception remains cautious but not panicky putting a relatively mild upward pressure on gold prices in short and mid-term .

And for those who hope armageddon will happen soon i have no sympathy such a situation could cause hunger and death in many parts of the world.

In any case for those who hold gold in any ways or manners we will still win as it climbs and as the markets slowly improve it will just take longer .

It should also be understood that some gold analyst see gold as being overbought right now at this time of the month ( see Gold Report from Reuters or on 300 hundred hub today ) , and the only reason they see gold could climb further next week is the fear caused by the possibility the US credit rating could be devalued by some credit rating agencies like S&P or Moody's as happened to the UK and Japan this past week .


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