Two charts and three measures of gold’s “real” price today…

With prices testing their record high of $1,033 an ounce set last year gold has again become the hot topic of conversation.

“Whether through exuberant hedgies or anxious private investors, gold just keeps pushing higher…”

So speculative betting on gold going higher now equals a record-busting 752-tonne position in Comex futures and options, yet this is not a bubble according to Michael Pento of Deltaga.

This week, the big story was once again coming from the gold market. Mid-week, the yellow metal hit $1020 – but the rally was not of the usual variety. Generally, investors flock to gold when the dollar is weak and inflationary fears run high. But as we all know, inflation is not a problem right now – despite the Fed’s best efforts.

Gold fell to its lowest in almost a week on Monday, weighed by a rallying dollar that dented the metal’s appeal to non-U.S. investors and record speculative positioning in the New York gold futures market.

As gold once again breaks the psychologically important barrier of $1,000 an ounce, all the pundits are wondering if it will last.

The UK Telegraph recently quoted at length Cheng Siwei, former vice chairman of the Standing Committee of the Chinese Communist Party. He explained how Beijing is dismayed by the “credit easing” coming out of the Federal Reserve.

That’s a question that Westerners have been asking for, oh, several millennia now. Or at least since Marco Polo aimed his ponies down the old Silk Road in 1271.

The just-concluded Group 20 (G20) meeting left us with a chorus of very “prudent” governments and central bankers singing the praises of easy monetary and fiscal conditions. So where can we take refuge when all the central banks in the world print money and governments run deficits in order to spend like drunken sailors? The answer is gold.

In the spirit of not suffering from confirmation bias, in today’s Notes we will try to make the bearish case against gold. So before you storm Notes HQ in Buenos Aires craving blood, hear us out. Many of our staff here love gold and have long term holdings.