Gas prices are highest ever for this time of year~ Good for PM's???

gsa1fan · February 19, 2012 7:46PM

Gas up up up

If memory severs me right wasn't last big gasoline spike the prior presidential election year

OPA · February 19, 2012 10:15PM

Good for PM's?

Nope...less money available for PM's.

roadrunner · February 19, 2012 10:50PM

Higher energy prices tend to weigh on the profitability and efficiency of miners....which often leads to weakness in bullion prices.

cohodk · February 19, 2012 11:47PM

no

jmski52 · February 19, 2012 11:53PM

OTOH, as higher gas prices cause a further drag on the economy will the Fed feel more compelled to keep those 401Ks and stock prices pumped up?

Increased gas prices are very similar to the servicing of more and more debt - it creates more drag on the economy. The harder the real economy has to stuggle, the more likely it will be for the Fed to inject more and more "liquidity". The real economy is what dictates both employment and tax revenues, both of which strike close to home in the hearts of politicians near electiontime.

I think we're simply caught in a downward spiral that supports gold prices until we start doing the right things, and there is a myriad of the right things that need doing, none of which are being done.

piecesofme · February 20, 2012 12:01AM

So when a gallon of gasoline hits $5, which it will in parts of the Continental U.S. by mid Summer, what will the effect be on an oz. of Silver?
I say high $40's at a minimum. Oil was considered to be a laggard when the PM's where having their run. I feel it will not happen conversely when Oil has its run, which is already happening. A rising commodity such as Oil will only cause all commodities to rise. I feel they will go hand in hand this time because Oil is bigger and more traded than any PM will ever be.

derryb · February 20, 2012 12:11AM

Most people don't realize that the price of oil affects the price of just about everything. Fortunately for our suffering economy the lower price of oil in recent years has been a blessing. Once it takes off all bets are off on any hope of recovery. The FED will be forced to move into panic mode and speed up the presses. This will in turn eventually drive PM prices higher. There really is no good economic news in the foreseeable future and rising oil prices will only make it worse. The fundamentals that make PMs strong will continue to make PMs strong.

One driver of PMs is price inflation. Look for rising oil prices to drive up ALL prices of oil dependent products and services. Look for an unresolved Iranian situation to drive up oil prices.

johnny9434 · February 20, 2012 12:30AM

thought i saw something on 4.50 to 5 $ a gallon for gas here in the northeast

OnlyGoldIsMoney · February 20, 2012 12:34AM

Gas is just under $3.70 in Penna. IMO people will start adjusting their spending once they see gas hit and hold $4.

ksammut · February 20, 2012 1:11AM

<< Gas up up up

If memory severs me right wasn't last big gasoline spike the prior presidential election year

>>

If memory severs me right wasn't last big gasoline spike the prior presidential election year

>>

There was a spike in 2008 and the gas prices fell off the cliff. There was also a spike last spring 2011.

In my opinion, higher gas prices do affect the overall inflation psychology which can only help gold prices.

The average person may not have as much to invest in PMs but the biggest buyers are foreign governments and my guess is that they will continue to buy. Regular investors who fear inflation or a monetary collapse, will probably invest in funds versus the metals themselves. For those of us who routinely invest in the metals themselves, I doubt the higher price of gas will have any significant impact on how much PMs we purchase.

I agree with roadrunner that the higher price in gas will hurt the miners but that may slow down the amount of mining done lowering the amount of gold (supply) coming out of the ground.

You can look at both the gas and gold charts but it is hard to make anything out of them as gold has been on such a long steady run up higher while gas prices have been up and down.

Another guess on my part is that the big guys (governments and fund investors) are more focused on the monetary problems facing the world and gold prices will go up because of that concern.

piecesofme · February 20, 2012 2:05AM

IMO people will start adjusting their spending once they see gas hit and hold $4.

As long as polls that ask people if higher fuel costs are NOT going to hinder them from taking that long anticipated family vacation keep coming out, that's music to Oil companies ears. That justifies them raising it even more. Of course they incur significant production costs, probably more than any other Industry, but as long as people are "ok" with it, that justifies it.

piecesofme · February 20, 2012 2:17AM

Also, one thing that may hold down the cost of fuel, all be it rather insignificant, is that there's real talk of making the blend of RFG gasoline that is currently 90/10 (10% is Ethanol) to 85/15 or even 80/20. But then what does that do to food costs? We can't get out of our own way.
If every single acre of land in the U.S. ...every single acre, could be used to grow corn for the purpose of it being used for Ethanol and it still would only reflect a 11% cut of the Oil that we use. Band-Aid on a gunshot wound imo.

DrBuster · February 20, 2012 2:50AM

<< Also, one thing that may hold down the cost of fuel, all be it rather insignificant, is that there's real talk of making the blend of RFG gasoline that is currently 90/10 (10% is Ethanol) to 85/15 or even 80/20. But then what does that do to food costs? We can't get out of our own way.
If every single acre of land in the U.S. ...every single acre, could be used to grow corn for the purpose of it being used for Ethanol and it still would only reflect a 11% cut of the Oil that we use. Band-Aid on a gunshot wound imo. >>

The 85/15 or 80/20 blend just absolutely kills engines. The only reason for it is to force people out of an older, just fine vehicle, into new cars designed to burn that crapola after destroying the older engine. Period.

derryb · February 20, 2012 3:00AM

ethanol is not about alternative energy sources, it is all about farmbelt politicians creating a market for their voters.

OnlyGoldIsMoney · February 20, 2012 3:14AM

<< IMO people will start adjusting their spending once they see gas hit and hold $4.

As long as polls that ask people if higher fuel costs are NOT going to hinder them from taking that long anticipated family vacation keep coming out, that's music to Oil companies ears. That justifies them raising it even more. Of course they incur significant production costs, probably more than any other Industry, but as long as people are "ok" with it, that justifies it. >>

Blaming US Oil Companies for high gas prices may make good 2012 anti-capitalist political fodder but is off the mark.

Oil is an international market and petroleum is used in much more than automobile fuel. We cannot regulate market prices by decree in the USA any more than you can regulate the market price of gold and silver.

Much of the world's oil production is nationalized - I believe that Iran, Mexico, Venezuela and many others fit in that mold. It is hard to blame US corporations for their actions.

Where I live a good fraction of the price at the pump is tax. Unlike the oil companies the taxing bodies skim their guaranteed profit (tax) right off the top. With higher gas prices comes less driving. However, the prospect that gas taxes will be reduced to aid motorists is vanishingly small.

NumbersUsacom · February 20, 2012 3:37AM

Rising Gas prices is inflationary by nature of the increasing price based on dollars, but and a big but, It acts more like a heavy tax burden and

has the potential to suffocate a nations economy.

derryb · February 20, 2012 10:37AM

$6 gasoline before July 1.

piecesofme · February 20, 2012 10:47AM

$6 gasoline before July 1

It's already over $5 for Premium in LA. $6 for Premium by July 1 is a no brainer. I'd go as far as to say $6.80/gal. & $160/bbl. at some point this Summer, especially if this Iran thing thing gets out of hand.

cohodk · February 20, 2012 10:48AM

In 2008 when oil went from 100 to 150, gold went from 1033 to 846.

derryb · February 20, 2012 10:48AM

<< $6 gasoline before July 1. >>

regular - nationwide

piecesofme · February 20, 2012 10:50AM

I don't think it'll happen Nationwide, but it will in the big cities.

OnlyGoldIsMoney · February 20, 2012 11:32AM

<< 

<< $6 gasoline before July 1. >>

regular - nationwide >>

The 2012 IRS Mileage Rate for using my auto for business is 51 cents. That's likely to go substantially if regular gas gets close to $6.

Wingsrule · February 20, 2012 12:05PM

OGIM - the rate is $0.555 per mile for 2012, unchanged since it was upped since mid 2011.

OnlyGoldIsMoney · February 20, 2012 12:53PM

<< OGIM - the rate is $0.555 per mile for 2012, unchanged since it was upped since mid 2011. >>

Oops, I forgot. You're correct.

Fortunately my tax preparer got the rate correct for 2011.

pf70collector · February 20, 2012 8:59PM

Iran has already stopping selling oil to Europe.

PerryHall · February 20, 2012 9:28PM

High gas prices are not good for incumbent politicians trying to get re-elected.

Goldbully · February 20, 2012 10:00PM

<< High gas prices are not good for incumbent politicians trying to get re-elected. >>

We can only HOPE?

PerryHall · February 20, 2012 10:16PM

<< 

<< High gas prices are not good for incumbent politicians trying to get re-elected. >>

We can only HOPE? >>

No! We can "vote the rascals out."

OnlyGoldIsMoney · February 20, 2012 10:53PM

<< High gas prices are not good for incumbent politicians trying to get re-elected. >>

We should not misunderestimate the opportunities to shift or evade blame when you can rely on a compliant MSM. Four quick options come to mind.

1. Ignore the story (high gas prices in 2008 were a big story - in 2012 it is a minor matter);

2. Shift the blame. Corporations, Wall Street and/or "the 1%" will do;

3. Its beyond my control. Blame the weather, Tsunami , sunspots, etc.;

3. Its all Bush's fault

That was easy.

jmb · February 20, 2012 11:14PM

Gotta love that when gas prices increased it was all Bush's fault and him wanting to enrich all of his oil buddy cronies.

Now with Obama in charge, well, $5/gallon gasoline really isn't that unreasonable.

Double standard much.

PerryHall · February 20, 2012 11:17PM

<< 

<< High gas prices are not good for incumbent politicians trying to get re-elected. >>

We should not misunderestimate the opportunities to shift or evade blame when you can rely on a compliant MSM. Four quick options come to mind.

1. Ignore the story (high gas prices in 2008 were a big story - in 2012 it is a minor matter);

2. Shift the blame. Corporations, Wall Street and/or "the 1%" will do;

3. Its beyond my control. Blame the weather, Tsunami , sunspots, etc.;

3. Its all Bush's fault

That was easy. >>

They can't effectively blame Bush anymore since he's been out of office for more than 3 years. They'll have to blame the Republican controlled congress instead.

morgansforever · February 21, 2012 9:37AM

Isn't the price of gas directy related to our dependency on it?
We are all slaves to the internal combustion engine and the fuel companies know this.
If fuel consumption dropped by 50%, what would happen to prices?

OnlyGoldIsMoney · February 21, 2012 9:51AM

<< Isn't the price of gas directy related to our dependency on it?
We are all slaves to the internal combustion engine and the fuel companies know this.
If fuel consumption dropped by 50%, what would happen to prices? >>

We'll be using internal combustion engines until something else better comes along. So far that has not happened.

Spooly · February 21, 2012 9:57AM

If fuel consumption dropped by 50%, what would happen to prices?

The world economy would be in flames.......

derryb · February 21, 2012 10:01AM

<< If fuel consumption dropped by 50%, what would happen to prices? >>

Since a cartel is involved, supply would drop by 50% and prices would remain unchanged.

morgansforever · February 21, 2012 10:10AM

My point is there is no real competition to the ICE, that is why prices can be manipulated as they see fit right?
Cut the useage and the consumer will control prices. I see a 105 lb. woman driving a 8 passenger Ford Excursion, I scratch my head.
I drive my 2.3L 4 cyl. Ranger to work, it gets nearly 30mpg. I try to spend as little as possible on fuel.
I've been leaning towards a 500cc enduro, probably a Honda XR 500. How I get to work is meaningless.
When will hydrogen fuel cells become practical?

EDIT: Stanley Meyer went across the U.S. on 23 gallons of water, in his buggy, then he mysteriously died.

Water as fuel

jmski52 · February 21, 2012 10:31AM

A winning energy policy would target all available energy sources in legitimate ways, and would analyze the viability of various energy sources in an unbiased way. That's not what we have now. Our government is so pervasive in almost all industries that honest competition is no longer possible. Everything is based on political considerations, if not on direct kickbacks - in order to pick the winners and losers. Insurance, drugs, banking, energy, education, healthcare - it's all politically driven.

Yes, we should be doing *everything* to promote energy sources, and this would create jobs in every quarter. I could even get behind some gentle incentives for fledgling industries, but not the massive handouts we've been seeing in wind and energy. It's NOT rocket science, but every type of technology would benefit from further R&D. The BS built around carbon rationing is mainly designed to make Al Gore richer.

The market is usually the best arbiter of economics, especially in the energy field and what works best absolutely WILL rise to the top. We should have a strategic energy reserve, but beyond that - we've got to stop shooting ourselves in the foot and let the market do its work - and that involves major, major, major personnel changes all throughout the city of Washington DC.

gsa1fan · February 21, 2012 11:10AM

High gas prices will fuel the need for alternatives

Since most of the price is taxes J6P will bare the burden. I'm still seeing 15 out 20 gas guzzling cars/trucks/SUV's on the road with a driver only. I'm guessing $5-6 a gallon it will take to change the American way of doing the daily grind.

morgansforever · February 21, 2012 11:34AM

<<High gas prices will fuel the need for alternatives Since most of the price is taxes J6P will bare the burden. I'm still seeing 15 out 20 gas guzzling>>

You reside in the area between the nail n the head

piecesofme · February 21, 2012 8:14PM

<<<Gotta love that when gas prices increased it was all Bush's fault and him wanting to enrich all of his oil buddy cronies.

Now with Obama in charge, well, $5/gallon gasoline really isn't that unreasonable.

Double standard much>>>

Are you really that naive to think that the Republicans still don't have control over a few things? Oil is still in the hands of Republicans, whether it's obvious or not. Raising fuel costs is the Partys last ditch effort for a chance at gaining majority control(the obvious way of seeing it because most Americans are too naive to dig deep to get facts...they're willing to believe what the media tells them they should believe) having no viable candidate.

derryb · February 21, 2012 8:55PM

Politicians don't control the price of oil. They do control foreign policy. Failed foreign policy dictates that we pay more than we should for imported oil. Price of oil is dictated by a foreign cartel. Failure to appropriately deal with their price fixing is why we pay what we pay.

Wingsrule · February 21, 2012 9:27PM

Remember how the sales of hybrid vehicles spiked when gas prices did a few years ago? As soon as the gas prices started falling, so did those sales. They have yet to recover to those levels, even with more choices on dealer lots. We typically don’t make difficult choices when there are much easier options. Foresight is a rare commodity for many.

jmb · February 21, 2012 11:07PM

Just making a point POM. I am WAY more informed than your average sheep. We still have media ?

piecesofme · February 22, 2012 12:50AM

Just making a point POM. I am WAY more informed than your average sheep. We still have media ?

I am, as well, speaking from a point of being in the Industry for the last 23+ years on several levels.

gsa1fan · February 22, 2012 12:58AM

<< Just making a point POM. I am WAY more informed than your average sheep. We still have media ?

I am, as well, speaking from a point of being in the Industry for the last 23+ years on several levels. >>

so your a politician

OnlyGoldIsMoney · February 22, 2012 12:59AM

<< <<<Gotta love that when gas prices increased it was all Bush's fault and him wanting to enrich all of his oil buddy cronies.

Now with Obama in charge, well, $5/gallon gasoline really isn't that unreasonable.

Double standard much>>>

Are you really that naive to think that the Republicans still don't have control over a few things? Oil is still in the hands of Republicans, whether it's obvious or not. Raising fuel costs is the Partys last ditch effort for a chance at gaining majority control(the obvious way of seeing it because most Americans are too naive to dig deep to get facts...they're willing to believe what the media tells them they should believe) having no viable candidate. >>

Much of the oil the USA uses is imported. I don't believe Republicans have much influence in Venezuela or Iran.

I recall paying under $1.60 a gallon in Virginia during December 2008 when W was still in the White House.

Can you explain the mechanism by which Republicans controlled the world price of oil since January 20, 2009? Do they control the price both when it rises and when it crashes (like 2008)?

57loaded · February 22, 2012 1:05AM

the refineries are switching to the "summer blend", creating a supply shortage. how much it will drop after most/all are back on line is anyone's guess.

BHO will do something predictable is only thing certain.

piecesofme · February 22, 2012 7:43AM

lmao at the ignorance and horse blinder views. I'll leave it alone and spend time doing something constructive.

derryb · February 22, 2012 8:29AM

speaking of ignorance

OnlyGoldIsMoney · February 22, 2012 8:36AM

<< speaking of ignorance >>

Indeed. Blame high gasoline prices on your class enemies - the private sector, Wall Street and the evil 1%.

slinc · February 22, 2012 9:59AM

<< speaking of ignorance >>

I love the comments there, I had to bookmark that site.

Gas prices are highest ever for this time of year~ Good for PM's???

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