Metals Minute 57: Gold and the World Economy
Metals prices have been in suspended animation for the last week, providing a continued opportunity to purchase a meaningful gift for the holiday season.
Gold was flat for the week at $1,792, with silver down a fraction to $22.51. Platinum was up a fraction to $960, with palladium rallying 4.9% for the week to $1,876. Since a year ago today, we have gold down 4.2%, silver down 8.4%, platinum down 6.8%, and palladium down 19%.
The story unfolding right now is one of the continued reduction of dollars used to conduct world trade. What began as cooperation between nations at odds with the United States (such as Iran, China, Russia, etc.) is now spreading to include nations traditionally considered an ally of the United States, such as India. Russia and India just announced a new partnership in which they will conduct trade using regional currencies and not use the dollar.
We already saw a similar pact between China and Russia for energy trade, and this trend seems likely to continue. Today the dollar accounts for less than 60% of world trade. As the dollar becomes less relevant, the importance of owning gold and silver will be evident to all.