Gold was higher from the far East to the mid-point of London trading on Wednesday, slumped from there into New York’s second hour, bottoming at $916, but then shot higher for the rest of the day including the Globex, and finished at $931.80/oz., up $12.80.

Something very unusual is happening in the oil markets… and it’ll keep the oil price way above $100 for the rest of year.

With all the sniping and arguing in the media lately… you might be a bit confused as to whether oil or gold is the best hedge in the current climate. The answer’s quite simple… let me explain…

Gold held steady above $880 through Hong Kong and the early London market yesterday, then started up and continued steadily up for most of the day, moving past $900, and recovering from each bout of selling to finish at $901.60, up $21.20.

Accidents don’t cause bubbles – Fed policy does…the world, again, turns its weary eyes to Paul Volcker…The real cost of the war between inflation and deflation hasn’t even begun to register…Why the oil price will correct itself…and more!

When a commodity or stock breaks out to new highs, as oil has done again this week, it’s extremely unwise to go short, as many are suggesting. I have no doubt, of course, that now I’ve said that in print, it will mark the top of the market.

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We will always need energy to heat and light our homes. We all need water to drink, to clean with, to cook with. Of course, this has always been true.

The recent Goldman Sachs oil price projection that put oil at $200 a barrel looks a little less likely today, as the price of oil eased off its $126 a barrel record. Analysts say oil’s drop is due to a combination of profit taking and a strengthening of the dollar against the euro and the yen. This from Casey Research on oil’s recent highs:

There is this overwhelming reluctance to admit that we’re simply in a new paradigm for prices and short of a wholesale collapse of the global economy, prices just aren’t going to pull back to a $75 level for oil,” wrote Neal Ryan, of Ryan Oil & Gas Partners.

Money Morning Investment Director Keith Fitz-Gerald – one of the first global financial gurus to predict triple-digit oil prices – has boosted his target price for crude oil from $187 to $225.