Former Federal Reserve Governor Lyle Gramley hinted on Canadian television last week that a big upward revaluation of Gold may figure heavily in the Fed’s attempt to rescue the US economy.
This comment suggests that the issue is in the Fed’s hands, but if the shorts on Comex get squeezed and the Comex defaults on physical delivery, the market, not the Fed, will decide the true value of Gold.
So, with that hint in the air, investors should take physical delivery of their Gold and not leverage positions. Do this and you will put more pressure on the shorts who have sold Gold that they are unable to deliver. Whether there is a massive squeeze on the Comex in December or February is irrelevant.
The Gold rush is on.
When Gold becomes unavailable, prices will have to go up by multiples, and the hammered mining sector will reach new highs. Thus, when Gold is not available in bullion form, the next best thing for investors will be companies that mine it.
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July 4th, 2009 at 12:25 pm
Thoughtful post and well written. Please write more on this if you have time.