In all charts, money stock values come from the St. Louis Fed. Gold stocks come from the Gold Council and gold prices from Kitco. These comparisons are for US money stock vs. World gold supply.
All charts start from a number greater than zero to better show monthly changes.
M2/World Gold Supply (oz) in 2009
MZM/World Gold Supply (oz) in 2009
M2/Gold Price in 2009
MZM/Gold Price in 2009
For the second month in a row, M2 and MZM continued to rise. However, the gold price rose much faster. I expected economic conditions, particularly housing, to deteriorate in November, but the numbers were more moderate. The first time homebuyer tax credit, foreclosure moratoriums, and Federal modification programs have slowed the housing correction and artificially limited supply at the low end.
Looking at the money supply to gold price ratios, it is the most expensive time in 2009 to buy gold. Inflation adjusted gold prices are still not near the peaks of 1980.
The first part of December saw a long overdue dollar rally. If it continues, gold prices will be under pressure.
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