Gold Fighting for Reserve Currency Status

Gold being looked to as Reserve Currency!

There has been a lot of confusion form people commenting on reading stories about gold, as one day a headline will read gold goes up on Greek concerns, and the next day the same headline will be applied to the U.S. dollar.

The reason this is happening and there are paradoxical movements between gold and the U.S. dollar, and the two are the only two currencies in the world being considered as reserve currencies, with gold making a bold upward movement and people feeling better about the consistency and safety of gold than they do about the dollar.

As to why one day gold and the dollar go in the same direction and the next day they go in the usual inverse relationship they normally do, could be a reflection of the uncertainty as to which one will win out in the minds of investors.

Everything at this time as far as economic data is conflicting, and I think that's the same with most commodities and businesses as well.

One day prices of commodities are going up on demand and the next day they're going down on China tightening its money supply; it can't be both. So the uncertainty is written about by writers who for the most part, don't know what is going on, and pretty copy one another in their writing, while putting it into their own words.

While there are many factors related to the price of gold, including inflation, printing more paper money, safety, and geo-political concerns, I think what the Greek sovereign debt problem has unveiled is the inherent weakness in paper money to deal with the types of problems we're facing, and if just tiny Greece can bring this type of response, what would happen if Spain or even a major country defaults on their debt? It seems it would be unfixable, and the European Union and the euro probably wouldn't last (not that it would be a big deal in that sense).

What matters to most people is how this will impact their lives, and gold is the only proven type of currency out there that has been resilient over thousands of years. Silver could be a second one, but that's not solely a currency, although it could step up as one. But gold stands above all currency competitors, and is battling to regain its place as the choice of those looking for a sound and healthy currency.