CHESSNOID

I don’t know why gold is skyrocketing but it is one of the ETFs I put some of my capital in for the short term.  There are many out there predicting some crazy numbers for gold which is up over $1,000 per ounce right now.

Sept. 17 (Bloomberg) --

Gold advanced, erasing an earlier decline, as signs of a recovering global economy spurred demand for precious metals as a hedge against rising inflation.

Bullion, which moves inversely to the dollar, rose for a third day as the currency traded near a one-year low against the euro before reports that may show Europe’s trade surplus is growing and the U.S. housing market is improving. U.S. consumer prices rose 0.4 percent in August, data showed yesterday. That was larger than forecast and followed no change in July.

“Yesterday’s higher-than-expected U.S. CPI numbers spurred further investment demand,” said Stefan Graber, an analyst with Credit Suisse Group in Singapore. “The move above the $1,000 mark is being warranted by the fundamentals” such as a weak dollar and inflation.

My guess for the move up is the weaker dollar and the US record deficits driving the price of gold. Speculators are jumping in with the investors so this could be the beginning of a new asset bubble. How long will it last? I am guessing as long as the dollar remains weak and the US deficit continues to go up, the trend for the price of gold will be up.

LA Times:

An index of the dollar’s value against six other major currencies fell 0.4% on Wednesday to its lowest level in nearly a year. It’s down 2.5% just this month.

The greenback has been skidding in large part because investors are more confident about a global economic rebound. That is luring money into riskier assets, including many emerging markets. Brazil’s main stock index is up 6.9% this month, for example. The South Korean market is up 5.8%.

But there also is an undercurrent of fear about the dollar’s long-term outlook, given the potentially debilitating effects on the currency from the massive U.S. budget deficit. One way to lessen that debt load would be to allow inflation to rise — which would bolster the case for classic inflation hedges such as gold.

For the moment, though, the precious-metal rally is mostly about momentum, many traders concede. “People who’ve been on the sidelines are going to jump in now,” Young said.