Koolau
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Back to HaHa's original point, while I understand the rational for oil decline and gold soaring. It still seems counter-intuitive.
The idea behind gold is it is an alternative currency, which can't be manipulated/debased by governments ok I get this. However, it seems to me that oil is also something that can't be easily manipulated by governments. Now a slowing economy will decrease the amount of oil consumed, but doesn't it also decrease the amount of jewelry bought, gold watches sold, and even industrial uses for gold.
Big, big differences between gold and oil (in addition to the uses already made abundantly clear in this thread). Much more so than "apples and oranges."
Oil is at or near it's elasticity inflection point (I just made up that term) That is, a 1% higher supply than we use and the price crashes. A 1% lower supply than we use and oil peaks to $150/barrel.
Gold, trades in extremely small amounts of a few thousand (maybe a few 10's of thousands) of ounces per day. The supply is virtually "infinite" by comparison. Also, when gold gets "used", it's not really gone. It's still in your ring or bracelet or necklace or in your computer. It CAN still be recovered. The world's supply of stored gold has been described as a chunk of gold the size of the largest barn you ever saw. So, while it isn't really infinite, compared to how much is traded (used) the supply is absolutely huge. Now, I don't claim to know how that all changes the dynamics, but it's clear that oil and gold trade for two completely different reasons. Trying to figure it out is probably not worth the brain cells.
Regarding "government manipulation of oil" - ever hear of OPEC? Yeah, they "leak" and don't totally control oil supply, but all they have to do is make supply change by 1% to accomplish their goal of changing the price dramatically.
Speaking of which, if the US wanted to crash the gold markets, all they would have to do is offer a few 100,000 oz of gold from Fort Knox to the "highest" bidder. Don't know that it would ever get back to $35/oz, but it wouldn't stay at $1700 - at least not until Fort Knox ran dry.
Hey, there's an idea for paying down the debt.