Gold Climbs Higher 10/1/2010

A few days ago the Federal Reserve announced it plans to lower the interest rate even more and it was no surprise to me when gold closed at 1318.00 today.

There are many factors affecting the skyrocketing price of gold. It is often an indicator or mounting military tensions as well as indicator of the global economic instability as all currencies, not just the dollar, are loosing their value against the precious metal.

But at this moment it is a matter of instability as well as demand. The demand steming from the fact that it is the wedding season in India where brides are traditionally lavished in gold. Considering that India is one of the fastest growing economies it is no surprise that gold consumption in that country has reached new levels.

Consumption of gold has also increased in China where a growing middle class is consuming just about everything that can be purchased as well as gold.

Keep an eye on "Strategic Metals"-Platinum, Paladium, Copper etc and you will see a sharp rise in their prices as well.

As the value of the dollar continues to slide the price of all these metals will continue to rise. It is perhaps a good time for this government to strengthen the value of the dollar by embracing "Protectionist Policies" (raising tariffs on imported goods) and find a way to bring back the American Production Factories that were closed nationally and opened on foreign soil by the evolving "Multi-National" companies.