GOLD — Deflation Hedge? (November 20, 2008)
Gold’s relative price strength in recent days — in the face of plummeting U.S. consumer and producer prices, declining prices for oil and other (non-precious metals) commodities, and lower multi-year lows in world equity markets — suggests that the yellow metal, technically speaking, may be building a solid base in the $770 to $800 range from which to embark on a sustainable advance into higher territory.
Interestingly, gold has been outperforming silver and the PGMs, suggesting that investors and traders are differentiating among the metals, favoring gold as a monetary asset, safe haven, and hedge.
Deflation in the Air
With all the talk suddenly about deflation, gold- and silver-market participants need to know just what effect deflation might have on these precious metals.
