Friday, December 26, 2008

Go Gold!

Gold did okay this week:

Gold futures for February delivery climbed $23.20, or 2.7 percent, to $871.20 an ounce on the Comex division of the New York Mercantile Exchange, the biggest gain for a most-active contract since Dec. 17. The metal is up 6.4 percent this month.

The article cites military tensions as the impetus for gold's rise, which is probably baloney. At any given time there's plenty of military action in the world, and gold doesn't always respond to that. What does make it jump is the kind of inflationary quant easing we've seen from the Fed this year. Gold will look even better when retail investors start to get spooked by any sign that the bubble in Treasuries is collapsing, like this one:

Treasuries posted their first weekly loss in almost two months as the U.S. sold record amounts of two- and five-year notes during a holiday week marked by lighter trading than usual.

The only thing standing between me and economic annihilation is my pile of gold. Gold, gold, gold. I love gold. It's the greatest thing since sliced bread.

Nota bene: Anthony J. Alfidi is long IAU and GDX.