Gold over $700, or not?

I had a head of steam up this morning to get to the office to write this blog. My chosen topic was gold going over $700 a troy ounce. I had scanned the headlines before I went home yesterday. They heralded the move. I didn’t look at them in depth.

I come in this morning to find out that gold did not really close above $700 yesterday. Spot gold was $695.30. That is certainly a healthy increase from the $673 price it closed at last week, but it wasn’t the magic $700.

What closed over $700 was a futures contract for delivery of gold. I don’t want to denigrate the importance of a futures contract, but when most people hear or see something, they think it applies to the here and now. Nowadays, though, you have to always look for the fine print or the gotcha line.

Less and less news seems to follow what I consider to be the basic understanding that news is what happens, not what might happen. Nowadays it is always something potentially dangerous that has been found in our food, our water, our air, that could very well kill us all and we had better watch to find out just what it is. If you happen to watch, you often discover it is just a story hyped to get ratings larded with suppositions rather than actual fact, so fewer of us watch.

Today’s gold trading may very well bring the spot price to close over $700. It is trading in that area as this is written. That would be the first time this has happened since May 12, 2006. This is significant in its own right. It should be ballyhooed when it happens.

It seems to me that yesterday’s headlines simply were jumping the gun.