Gas at $130; Gold Pullback to $900
The gasoline prices at the pump is going out of hand. It keeps rising to its new highs due to low supply worldwide. For many people, gas is like a need rather than a want because it is not easy to travel within North America without an automobile. Therefore, a car is one of the basic necessities in this country.
Due to the high gasoline prices, some people chose not to drive and take public transportation instead. This doesn't impact the gasoline prices much because there are far more people who drive and were forced to pay the high gasoline prices at the pump.
The prices of gasoline have a large adverse impact on the overall economy. Usually, as prices of gasoline go up, the overall market will be down. Gasoline alternatives such as biodiesel, diesel, and ethanol are actively being developed. This might have slight impact on gasoline prices, but the prices will keep on increasing in the future due to low supply of gas worldwide.
Gold is another commodity that is near its all-time highs now. IMO, gold is a good investment because the worldwide economy went downhill after year 2000. However, I don't think it will keep rising much because I believe the US economy will rebound some time in the near future. Gold values vary a lot and it is directly related to the value of the national currency.
Similar to gas prices, a weak US dollar will yield to a higher gold value, and vice-versa. This is because people fear that their hard-earned money will become worthless when there is a major crisis going on. They view gold as a relatively "safe" investment where they can sell it to exchange for basic necessities such as food or transportation.