Gold prices spiked this week, gaining over $50 per ounce in one trading day. In the absence of evidence of widespread, surging consumer prices, and with relative calm on the geo-political stage, the natural question to ask is, “What does this signal?”. Japan and China have intervened in currency markets this week with Japan trying to reduce the value of the yen versus the dollar and China willing to let the Yuan appreciate against it. These factors seem to neutralize one another with regard to the impact on gold prices. Some gold mining companies recently announced that they are removing their hedging programs, meaning that they are not selling future production at pre-set prices, but instead, will sell the production at whatever prices exist when the metal is delivered to the customer. A knee jerk reaction would be for investors to assume that the miner’s hedge removals are in fact indicating higher gold prices in the future, prompting investors to purchase the yellow metal now trying to beat an anticipated increase in prices. Does this actually mean that pure price speculation is driving gold markets? While more evidence is needed to discern how an investor might proceed, a reduction in gold holdings could be in order.