Will this new war on the Islamic State ever affect the price of gold?

So I'm sure you've heard that the US and allies are bombing upon ISIS and trying hard to beat them down. Do you think that this is a war that will truly affect the price of PM's? I heard that war usually makes the price o PM's go upward but I've never noticed it happen in any war, have you? What do you think?? Are we going to be on another 50 year hiatus until we see the price of gold skyrocket or will it happen sooner? Any thoughts?

 

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The only reason why someone could speculate that Gold will rise during wars is because wars cost money which can bring us into debt and then increase inflation. I haven't been following the ISIS story and I also question what our Allies are actually doing over there. But that's not important what is important is that the price of Gold will rise again probably to the mid $1300 or maybe low $1400 and linger around there for a bit only to drop down to the $1200s again. I don't see Gold skyrocketing to $5000/OZ anytime soon. The Feds are good at keeping inflation stagnant however deflation is worse and we should be prepared for that.

the old Boy Scout motto. Be prepared.

 

Political...Mod alert, mod alert!

 

As long as the poster is just "questioning" within his own mind, and not within the forum 'discussion' he is OK with the rules. Josh is smart enough not to cross over the rules. I see gold under 1200 a real possibility by the end of the year. But there isn't enough margin to go short at this point, IMO. If gold gets back to 1350 due to world problems ( Check out Asia's and Russia's significant problems), then I would consider paper shorting.
You can mention political situation exist, just not enter into discussion opinions as why, who you think is the blame, what should we do about it, etc. THAT will get a member into trouble.

 

when currency goes down, gold goes up, and our dollar is pretty strong right now

 

There's no logical reason for gold to move up as a result of us bombing Syria. If anything, that, coupled with the rearmament of our nuclear stockpile, might make America look "stronger" from a military standpoint, which would strengthen the dollar and cause gold prices to concede ground further.

On a side note, I think a comment blaming the Feds for stagnating inflation is politically driven... The Federal Reserve has been talking about raising rates for a few quarters now, so they're doing anything but suppressing inflation, at this point.

 

Post deleted after going back and reading Jim's comment.

Chris

 

Affect on PM? Why? Small localized war not affecting major gold producing or gold buying areas. Heck, there are ten other wars going on around the world at any given time, I have no idea why this one would be much different than them.

 

I used to think that wars and bad news drove PM prices higher.
And I have read it before in posts where people think it is true.
However this is one stubborn downturn we are in now.

 

It's about confidence in dollars/yen/euro/yuan/pounds/etc. If the event doesn't bring into question the strength of a major currency, it likely won't impact the price of PMs. Wars or events that result in supply disruptions would also lead to high PM prices. World wars tended to cause run ups in base metal prices, rather than PM prices, as more steel/copper/etc would be needed to supply them. With drones and a greater reliance on computers, an arms race *might* lead to a run up in platinum group and rare earth group metals, but it's unlikely to impact the price of gold until alternatives used in components become too costly. It might have a marginal impact on silver once excess supply is exhausted, but that would take a while, since we have about two years of standard consumption held in investment form.

 

What about the dong? Any confidence in the dong? It is the Vietnamese money.

 

The dog is actually an interesting play. I expect good things for Vietnam as China's wages are forced to rise.