Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Coronavirus Pandemic Vaccines Indicator Current State - 3rd Mar 21
AI Tech Stocks Investing 2021 Buy Ratings, Levels and Valuations Explained - 3rd Mar 21
Stock Market Bull Trend in Jeopardy - 3rd Mar 21
New Global Reserve Currency? - 3rd Mar 21
Gold To Monetary Base Ratio Says No Hyperinflation - 3rd Mar 21
US Fed Grilled about Its Unsound Currency, Digital Currency Schemes - 3rd Mar 21
The Case Against Inflation - 3rd Mar 21
How to Start Crypto Mining Bitcoins, Ethereum with Your Desktop PC, Laptop with NiceHash - 3rd Mar 21
AI Tech Stocks Investing Portfolio Buying Levels and Valuations 2021 Explained - 2nd Mar 21
There’s A “Chip” Shortage: And TSMC Holds All The Cards - 2nd Mar 21
Why now might be a good time to buy gold and gold juniors - 2nd Mar 21
Silver Is Close To Something Big - 2nd Mar 21
Bitcoin: Let's Put 2 Heart-Pounding Price Drops into Perspective - 2nd Mar 21
Gold Stocks Spring Rally 2021 - 2nd Mar 21
US Housing Market Trend Forecast 2021 - 2nd Mar 21
Covid-19 Vaccinations US House Prices Trend Indicator 2021 - 2nd Mar 21
How blockchain technology will change the online casino - 2nd Mar 21
How Much PC RAM Memory is Good in 2021, 16gb, 32gb or 64gb? - 2nd Mar 21
US Housing Market House Prices Momentum Analysis - 26th Feb 21
FOMC Minutes Disappoint Gold Bulls - 26th Feb 21
Kiss of Life for Gold - 26th Feb 21
Congress May Increase The Moral Hazard Building In The Stock Market - 26th Feb 21
The “Oil Of The Future” Is Set To Soar In 2021 - 26th Feb 21
The Everything Stock Market Rally Continues - 25th Feb 21
Vaccine inequality: A new beginning or another missed opportunity? - 25th Feb 21
What's Next Move For Silver, Gold? Follow US Treasuries and Commodities To Find Out - 25th Feb 21
Warren Buffett Buys a Copper Stock! - 25th Feb 21
Work From Home Inflationary US House Prices BOOM! - 25th Feb 21
Man Takes First Steps Towards Colonising Mars - Nasa Perseverance Rover in Jezero Crater - 25th Feb 21
Musk, Bezos And Cook Are Rushing To Lock In New Lithium Supply - 25th Feb 21
US Debt and Yield Curve (Spread between 2 year and 10 year US bonds) - 24th Feb 21
Should You Buy a Landrover Discovery Sport in 2021? - 24th Feb 21
US Housing Market 2021 and the Inflation Mega-trend - QE4EVER! - 24th Feb 21
M&A Most Commonly Used Software - 24th Feb 21
Is More Stock Market Correction Needed? - 24th Feb 21
VUZE XR Camera 180 3D VR Example Footage Video Image quality - 24th Feb 21
How to Protect Your Positions From A Stock Market Sell-Off Using Options - 24th Feb 21
Why Isn’t Retail Demand for Silver Pushing Up Prices? - 24th Feb 21
2 Stocks That Could Win Big In The Trillion Dollar Battery War - 24th Feb 21
US Economic Trends - GDP, Inflation and Unemployment Impact on House Prices 2021 - 23rd Feb 21
Why the Sky Is Not Falling in Precious Metals - 23rd Feb 21
7 Things Every Businessman Should Know - 23rd Feb 21
For Stocks, has the “Rational Bubble” Popped? - 23rd Feb 21
Will Biden Overheat the Economy and Gold? - 23rd Feb 21
Precious Metals Under Seige? - 23rd Feb 21
US House Prices Trend Forecast Review - 23rd Feb 21
Lithium Prices Soar As Tesla, Apple And Google Fight For Supply - 23rd Feb 21
Stock Markets Discounting Post Covid Economic Boom - 22nd Feb 21
Economics Is Why Vaccination Is So Hard - 22nd Feb 21
Pivotal Session In Stocks Bull Bear Battle - 22nd Feb 21
Gold’s Downtrend: Is This Just the Beginning? - 22nd Feb 21
The Most Exciting Commodities Play Of 2021? - 22nd Feb 21
How to Test NEW and Used GPU, and Benchmark to Make sure it is Working Properly - 22nd Feb 21
US House Prices Vaccinations Indicator - 21st Feb 21
S&P 500 Correction – No Need to Hold Onto Your Hat - 21st Feb 21
Gold Setting Up Major Bottom So Could We See A Breakout Rally Begin Soon? - 21st Feb 21
Owning Real Assets Amid Surreal Financial Markets - 21st Feb 21
Great Investment Ideas For 2021 - 21st Feb 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

New Record Gold Highs in USD, GBP and EUR on Moody’s Ireland Debt Downgrade

Commodities / Gold and Silver 2011 Jul 13, 2011 - 08:01 AM GMT

By: GoldCore

Commodities

Best Financial Markets Analysis ArticleGold is trading at $1,572.35/oz, €1,116.17/oz and £985.49/oz.

Gold for immediate delivery rose to new record nominal highs of 987.58 British pounds and 1575.18 U.S. dollars in London this morning. New record nominal highs were seen for gold in euros (1,123.50 euros per ounce), pounds and dollars yesterday.


Gold rose soon after FOMC minutes showed that the Federal Reserve is considering further quantitative easing or QE3 and after Moody’s downgraded Ireland’s debt to junk status. The very poor trade deficit numbers in the U.S. yesterday ($50.2 billion in May) and the UK this morning (£8.5 billion in May) is also supporting gold today.

Cross Currency Rates

The Moody’s downgrade of Ireland was expected but the timing was very bad given the increasing turmoil in Eurozone bond markets and deepening risk of contagion due to bond risk in Spain and Italy, the world’s third largest debtor after Japan and the U.S.

While Italian and Spanish bond yields have fallen today, the Irish 10 year yield rose to new euro era record highs at 13.74%.

While UK inflation figures yesterday were slightly better than expected, today’s unemployment figures were worse than expected. Jobless claims rose at their fastest pace since May 2009, showing the UK recovery is faltering and jobs are being lost as the deepest government budget cuts since World War II take hold.

XAU-GBP Exchange Rate

The FOMC’s hinting of further QE3 is of course gold bullish. Although, it is likely to be packaged with some new fangled meaningless acronym. The fragile nature of the U.S. recovery has long meant that the threat of quantitative easing, or money printing and debt monetization, coming to an end was unlikely.

While the Federal Reserve may be planning significant debt monetization in order to inflate away their massive debts ($14.495 trillion national debt and unfunded liabilities of between $60 trillion and $100 trillion) some of their larger creditors such as China and Russia have communicated to the Federal Reserve that the U.S. should not debase their dollar holdings.

Gold Spot $/oz

Russian Prime Minister Vladimir Putin said yesterday that the United States is acting like a hooligan. Putin lampooned the Federal Reserve's $600 billion bond-buying spree for flooding the world with cheap dollars.

"They turn on the printing presses and fling them (dollars) over the entire world to resolve their immediate tasks. They say monopolies are bad but only if they are foreign -- their own are good. So they use their monopoly on printing money to the full.”

Meanwhile, the increasingly powerful Chinese credit rating agency, Dagong has suggested that they will downgrade the U.S. regardless of whether the US Congress reaches an agreement on raising its statutory debt limit.

Guan Jianzhong, chairman and CEO of Dagong, said that the downgrading is really just "a matter of time and extent".

Gold’s record highs in major currencies is a sign that the risk of contagion in global financial markets is deepening.

A U.S. sovereign down grade could be the catalyst for contagion.

Contagion in bond markets, financial markets and banking systems would almost certainly lead to contagion in currency markets as fiat currencies are debased en masse in order to prevent a deflationary collapse.

XAU-EUR Exchange Rate

Governments internationally remain in denial about the scale of the crisis and the ramifications.

The ramifications are that some western countries are now facing the risk of an Argentina style economic meltdown.

Exaggerated threats of ATMs not functioning have been used by bankers to justify massive taxpayer bailouts of insolvent banks.

The unfortunate reality is that the massive bank bailouts now mean that cash not coming out of ATM machines may soon be the least of our worries.

Contagion and economic meltdown in western countries would involve runs on banks (insolvent banks backed or “guaranteed” by insolvent states), “bank holidays”, freezing of bank accounts and deposit withdrawal restrictions.

This was seen in Argentina in 2001. Capital controls and exchange controls would also be likely.

In such a scenario, keeping the majority of one’s wealth in savings or deposit accounts in banks or other institutions – whether that be pound, dollar, euro deposits (or deposits in another depreciating fiat currency such as the yen or Swiss franc) is not prudent.

Given the global and systemic nature of the crisis and the huge challenges facing the U.S., the UK, Eurozone countries and Japan – all banks internationally would be vulnerable.

National bankruptcies in western countries would also see insolvent governments unable to pay public sector wages (nurses, police, teachers etc ) or pay for public services. Pensions and social welfare payments could not be paid either.

Social unrest would inevitably ensue.

Gold is essential financial insurance and will protect people from these worst case scenarios – as it has done throughout history.

International equities and international bonds (high credit, low duration) will also offer protection. Provided they are owned in a liquid manner and are held with safe custodians and counterparties. Liquidity and counter party risk will be of paramount importance.

These real risks mean that continuing talk of gold being ‘risky’ and a ‘bubble’ remains uninformed. Some non gold experts have been saying this for more than 3 years - when gold ‘peaked’ at $850/oz in March, 2008.

Uninformed comment by vested interests and others who continue to not know their financial, economic and monetary history is unfortunate. It discourages people from protecting themselves and their families from the coming financial and economic difficulties.

We do not think an economic meltdown is inevitable. Indeed, there remain options which would greatly ameliorate this worse case scenario. However, as ever, it is important to acknowledge this risk and prepare ones finances by becoming properly diversified and owning gold.

Denial and false hope will ensure even greater financial and economic pain.

As ever it remains prudent to hope for the best but be prepared for less benign scenarios.

SILVER
Silver is trading at $36.63/oz, €26.00/oz and £22.96/oz.

PLATINUM GROUP METALS
Platinum is trading at $1,742.00/oz, palladium at $770/oz and rhodium at $1,925/oz.

GOLDNOMICS - CASH OR GOLD BULLION?



'GoldNomics' can be viewed by clicking on the image above or on our YouTube channel:
www.youtube.com/goldcorelimited

This update can be found on the GoldCore blog here.

Yours sincerely,
Mark O'Byrne
Exective Director

IRL
63
FITZWILLIAM SQUARE
DUBLIN 2

E info@goldcore.com

UK
NO. 1 CORNHILL
LONDON 2
EC3V 3ND

IRL +353 (0)1 632 5010
UK +44 (0)203 086 9200
US +1 (302)635 1160

W www.goldcore.com

WINNERS MoneyMate and Investor Magazine Financial Analysts 2006

Disclaimer: The information in this document has been obtained from sources, which we believe to be reliable. We cannot guarantee its accuracy or completeness. It does not constitute a solicitation for the purchase or sale of any investment. Any person acting on the information contained in this document does so at their own risk. Recommendations in this document may not be suitable for all investors. Individual circumstances should be considered before a decision to invest is taken. Investors should note the following: Past experience is not necessarily a guide to future performance. The value of investments may fall or rise against investors' interests. Income levels from investments may fluctuate. Changes in exchange rates may have an adverse effect on the value of, or income from, investments denominated in foreign currencies. GoldCore Limited, trading as GoldCore is a Multi-Agency Intermediary regulated by the Irish Financial Regulator.

GoldCore is committed to complying with the requirements of the Data Protection Act. This means that in the provision of our services, appropriate personal information is processed and kept securely. It also means that we will never sell your details to a third party. The information you provide will remain confidential and may be used for the provision of related services. Such information may be disclosed in confidence to agents or service providers, regulatory bodies and group companies. You have the right to ask for a copy of certain information held by us in our records in return for payment of a small fee. You also have the right to require us to correct any inaccuracies in your information. The details you are being asked to supply may be used to provide you with information about other products and services either from GoldCore or other group companies or to provide services which any member of the group has arranged for you with a third party. If you do not wish to receive such contact, please write to the Marketing Manager GoldCore, 63 Fitzwilliam Square, Dublin 2 marking the envelope 'data protection'

GoldCore Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules