Gold Soars To New High; Oil Futures Overrun the Century Mark, As US Markets Plunge

Happy New Year. Gold and Oil have moved in tandem to set new records in a convergent trend showing the instability of the Middle East -- and around the globe -- continues in the forefront of investor awareness. This has not changed.

In the meantime, the major indices in the U.S. Stock market show that we are taking a beating today. The DJIA is down over 200 points, and the Nasdaq off 40, while the S & P shows a loss of some 15 points.

Here is what the Associated Press has to say about the matter in print:

"NEW YORK (AP) -- Oil prices soared to $100 a barrel Wednesday for the first time ever, reaching that milestone amid an unshakeable view that global demand for oil and petroleum products will continue to outstrip supplies.

Surging economies in China and India fed by oil and gasoline have sent prices soaring over the past year, while tensions in oil producing nations like Nigeria and Iran have increasingly made investors nervous and invited speculators to drive prices even higher.

Violence in Nigeria helped give crude the final push over $100. Bands of armed men invaded Port Harcourt, the center of Nigeria's oil industry Tuesday, attacking two police stations and raiding the lobby of a major hotel."

You can read the full article here: http://biz.yahoo.com/ap/080102/oil_prices.html

Now you know I don't want to say I told you so, however, since I did .......

Gold just hit a new all time high, reaching over $855 just as Oil transcends the century mark. This is not accidental, but shows the skiddishness of investors who are running to more secure assets, and U.S. securities tumble. What does this mean? It means that the people who are selling their stocks are the ones buying oil and gold.

This is why the two more secure assets move in tandem and move opposite the U.S. exchanges.

Here is the article caption of choice on the gold rally:

"Gold price breaks 28-year record to hit new peak"

"Unrest in Pakistan, a faltering dollar and surging oil futures sent the price of gold soaring to a record high on Wednesday, beating its previous highest level set 28 years ago. The precious metal rose to 859.20 US dollars an ounce, smashing its peak of 850 US dollars reached on January 21, 1980. It later slipped back to 857.75 US dollars on profit-taking."

Read Full Article? http://news.smh.com.au/gold-price-breaks-28year-record-to-hit-new-peak/20080103-1jxx.html