Gold: I Called It
November 10th, 2006 by Justin
Ok it’s an admittedly arrogant title, especially considering we’re not in the business of writing recommendations. While I will make statements of opinion from time to time, I’m mostly interested in providing a daily sampling of the most interesting developments in the financial world.
Nevertheless, the news that China will be diversifying its $1 trillion + foreign exchange reserves and is considering “lots of options” in terms of what types of assets will be bought perfectly validates my post on world gold reserves written 10 days ago. In it I stated that “even a slight shift in their [Asian central banks’] allocation could have huge bullish implications for the yellow metal.”
And so it came to pass. With yesterday’s news that China is considering moving away from the dollar and towards a variety of other assets (including emerging markets), gold rallied, the dollar tumbled, and pretty much every anti-dollar exploded to the upside. It’s largely coincidence but I hope that future comments and suggestions will play as well into the hands of those making trading decisions.
