Morning Gold Fix: July 1, 2010 Submitted by Tyler Durden on 07/02/2010 08:12 -0500
http://www.zerohedge.com/article/morning-gold-fix-july-1-2010
Gold fell a staggering $36.30, or 3.5% per 100 troy ounces on Thursday. The dollar, another safe haven asset, dropped 2%. Some analysts have suggested gold’s move was the result of a large fund unwinding a position by selling gold and buying back the euro. Yesterday’s activity was the decisive battle for the time being between the “it’s a commodity crowd” versus the “it’s money stupid” folks. Put another way, if you believe that we are in a deflationary cycle (like us), and you believe that gold is a commodity only (not like us), then its price must go down relative to currency during deflationary meltdowns. If however you believe that Gold is not a commodity, and that it is money, then you believe it should hold value , or even appreciate in a deflationary spiral.
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