Overnight, gold prices plunged to around US$575 while oil prices plunged to around US$58. For more than four months already, ever since the great commodity correction, gold prices had been dancing around and going nowhere. We recalled the days in June 2006 when gold fell to around US$545 and during the Israeli-Hezbollah fighting when gold rose to around US$670. The gold fever, which started late last year and reached a pinnacle in May 2006, had subsided since then. Now, an air of uncertainty and unpredictability surrounds gold. Where will it go next in the short term?
We don?t know. But since we are long-term holders of gold, we aren?t the least perturbed by their untamed price volatility. That is because we know the story of gold…
Six years ago, gold had kept a low profile and rose quietly. Her message, to those who were wise and listening, was that something amiss had been going on in the financial system. She was like a prophet warning us of an impending disaster. As with most prophets, no one listened to the prophetic message of gold anyway. Then late last year, gold caught the eye of the mob. They grabbed for gold even though they knew not the reason for grabbing her. But all of a sudden, in May 2006, the mob changed their mind at a flick. Swiftly, they were dumping gold indiscriminately even though they still knew not the reason for doing so. Since then, the mob was at loss with what to do with gold. She passed from hand to hand, seeking to find an owner who would understand her true worth…
This is the story of gold so far.
