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Dave Forest

Dave Forest

Dave is Managing Geologist of the Pierce Points Daily E-Letter.

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If You Think Gold is Just a Dollar Thing

There's a lot of speculation these days about the gold price.

One of the favorite theories is dollar weakness. The rising gold price is caused more by a falling dollar, than by increasing demand for the metal.

But the data says otherwise.

This week, the gold price in yen neared a record. Front-month Japanese gold hit 3,725 yen per gram. Just a hair below the all-time high of 3,788 yen/gram set on February 22, 1983.

Gold Price in Yen

Seeing gold at record levels in other currencies is a sign something beyond dollar weakness is afoot.

Here's to international gold.

By. Dave Forest of Notela Resources




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  • Anonymous on November 19 2010 said:
    The "something" beyond dollar weakness is plunging faith in all paper money, which represent a global scam such as the world has never seen. To pay their debts, most western countries will need to devalue their currencies drastically. To stay competitive, China, Brazil and others with better currencies will be forced to push their values down too. All tangibles offer a refuge from currency collapses but few are as portable, or as universally desired, as gold and silver.
  • Anonymous on November 19 2010 said:
    I still tend to believe that 90% of the latest move has been dollar related. I look at gold in Euros and honestly,in September and October when it rallied from $1250 to $1350, it was at €975 throughout, only breaking at the beginning of november before reverting back. Almost same story in CHF
  • Anonymous on November 19 2010 said:
    [quote name="Nowherebeach"] ...China, Brazil and others with better currencies will be forced to push their values down too. All tangibles offer a refuge from currency collapses but few are as portable, or as universally desired, as gold and silver.[/quote]That's it in a nutshell. The "global reserve currency" sets the pace in the race to the bottom. No one else can afford to let their currency get too far out of sync with it, so they're all being driven down.
  • Anonymous on November 19 2010 said:
    a true bull market when gold rises in all currencies
  • Anonymous on November 22 2010 said:
    just this centuries replacement for Smoot Hawley act and protection of Labor.Could well end with the same result as Smoot Hawley.....entry into a worldwide trade war and of course the 1st Great Deprsn.
  • Anonymous on March 13 2011 said:
    The answer does go beyond the dollar, or even the "dollar as the world's reserve currency". Once ALL global currencies became fiat (after "Nixon shock" of 1971), the relative value of "real" long-lived commodities, like gold and silver, became the tide that now swamps every leaky boat (all fiat currencies are leaky boats by their very nature). It is ironic to me that we refer to fiat as "floating" currency, when "sinking" would be the more accurate term. The fact that all currencies are now fiat (including now the rapidly expanding USD) is the reason why this effect would inevitably be felt, as it is now, across all currencies, and not just the dollar. Currencies that were once tied to the lone floating dollar raft are now all free to sink, as they all inevitably should -- and more and more in unison.

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