Of course it returns to PPP ... eventually. It really depends on how long is long term to you. As far as the correction to $1,500 goes I'm talking about weeks. long(er) term is after Greece defaults, which really isn't that far away. Long Term ... some time in the next 20 years, Gold will return to PPP... YES

The issue today is there's lots of demand for gold as central banks are in a buying mood ... however over the next 10 years there will be new mines coming on stream increasing supply. Increase in supply has a tendency to soften prices.

The Canadian dollar traded under PPP ( roughly $.80 PPP??) to the USD for more than a decade. Now it's above PPP and spent very little time at or near PPP. With the US doing it's darndest to lower the value of it's own dollar commodity prices will remain high for quite some time and PPP will remain in flux around the globe.

Unfortunately, with the going's on in Europe and the Euro falling like a turkey tossed from a helicopter (remember WKRP in Cincinatti?) the USD is acutally going up ... go figure. It seems Europe is tossing a wrench in Bernanke's plans to devalue the dollar to the point where debt doesn't matter.

Speaking of which, isn't the US the oldest union of independent states in the world? shouldn't they be setting an example for the rest of the world on how to get along? Seems the children in Washington have some 'splaning to do. Why wait for Europe to solve their problems? It will only make a bigger mess and negate everything the US has tried to do thus far. have they figured that out yet?

The world is a bloody mess. Someone knock some sense into these politicians!!