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New Message from Gold?
December 19, 2011

What are gold and silver trying to tell us in recent weeks.? Are they trying to tell us anything?

Gold is a both a hedge against inflation and a barometer of the level of financial fear that exists in the world.

Usually we think of gold as reaction to events. Money supply expands, gold price goes up. Simple.

What if there is more to it than that? The stock market has long been credited with forecasting economic activity six months in the future.

Could gold be taking on this characteristic now that so many Wall Street exchange traded funds, hedge funds and other investment vehicles are involved in daily trading?

What would the financial world be like if the price of gold was an indicator of inflation six months down the road like the stock market is of the economic health?

Would that mean the gold market by its weakness is forecasting in recent weeks that inflation will be coming down?

Silver, because it is an industrial metal, already has some economic health properties like copper, which is called Dr. Copper because it diagnoses future economic activity.

It might be interesting to test this hypothesis and see what the headline inflation rate is for consumer price index next May.

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Strike It Rich with Pocket Change, 2nd Edition

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About the Author
David C. Harper has been a coin collector since 1963. He joined the Krause Publications editorial staff in 1978 and is currently editor of Numismatic News and World Coin News. He also edits two books annually, North American Coins & Prices and Coin Digest. He is the author of the Class of '63 column that runs each week in Numismatic News. His first bylined numismatic article appeared in the June 1971 issue of Coins Magazine and his various Krause Publications assignments included a stint as editor of the magazine 1980-1983. Harper received a bachelor of science degree from the University of Wisconsin-Oshkosh in 1977. He had a double major of journalism and economics.

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