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
AMD Ryzen Zen 3 NO UK MSRP Stock - 5600x, 5800x, 5900x 5950x Selling at DOUBLE FAKE MSRP Prices - 29th Nov 20
Stock Market Short-term Decision Time - 29th Nov 20
Look at These 2 Big Warning Signs for the U.S. Economy - 29th Nov 20
Dow Stock Market Short-term and Long-term Trend Analysis - 28th Nov 20
How To Spot The End Of An Excess Market Trend Phase – Part II - 28th Nov 20
BLOCKCHAIN INVESTMENT PRIMER - 28th Nov 20
The Gold Stocks Correction is Maturing - 28th Nov 20
Biden and Yellen Pushed Gold Price Down to $1,800 - 28th Nov 20
Sheffield Christmas Lights 2020 - Peace Gardens vs 2019 and 2018 - 28th Nov 20
MUST WATCH Before You Waste Money on Buying A New PC Computer System - 27th Nov 20
Gold: Insurance for Prudent Investors, Precious Metals Reduce Risk & Preserve Wealth - 27th Nov 20
How To Spot The End Of An Excess Market Trend Phase - 27th Nov 20
Snow Falling Effect Christmas Lights Outdoor Projector Amazon Review - 27th Nov 20
4 Reasons Why You Shouldn't Put off Your Roof Repairs - 27th Nov 20
Further Clues Reveal Gold’s Weakness - 26th Nov 20
Fun Things to Do this Christmas - 26th Nov 20
Industries that Require Secure Messaging Apps - 26th Nov 20
Dow Stock Market Trend Analysis - 25th Nov 20
Amazon Black Friday Dell 32 Inch S3220DGF VA Curved Screen Gaming Monitor Bargain Deal! - 25th Nov 20
Biden the Silver Bull - 25th Nov 20
Inflation Warning to the Fed: Be Careful What You Wish For - 25th Nov 20
Financial Stocks Sector ETF Shows Unique Island Setup – What Next? - 25th Nov 20
Herd Immunity or Herd Insolvency: Which Will Affect Gold More? - 25th Nov 20
Stock Market SEASONAL TREND and ELECTION CYCLE - 24th Nov 20
Amazon Black Friday - Karcher K7 FC Pressure Washer Assembly and 1st Use - Is it Any Good? - 24th Nov 20
I Dislike Shallow People And Shallow Market Pullbacks - 24th Nov 20
Small Traders vs. Large Traders vs. Commercials: Who Is Right Most Often? - 24th Nov 20
10 Reasons You Should Trade With a Regulated Broker In UK - 24th Nov 20
Stock Market Elliott Wave Analysis - 23rd Nov 20
Evolution of the Fed - 23rd Nov 20
Gold and Silver Now and Then - A Comparison - 23rd Nov 20
Nasdaq NQ Has Stalled Above a 1.382 Fibonacci Expansion Range Three Times - 23rd Nov 20
Learn How To Trade Forex Successfully - 23rd Nov 20
Market 2020 vs 2016 and 2012 - 22nd Nov 20
Gold & Silver - Adapting Dynamic Learning Shows Possible Upside Price Rally - 22nd Nov 20
Stock Market Short-term Correction - 22nd Nov 20
Stock Market SPY/SPX Island Setups Warn Of A Potential Reversal In This Uptrend - 21st Nov 20
Why Budgies Make Great Pets for Kids - 21st Nov 20
How To Find The Best Dry Dog Food For Your Furry Best Friend?  - 21st Nov 20
The Key to a Successful LGBT Relationship is Matching by Preferences - 21st Nov 20
Stock Market Dow Long-term Trend Analysis - 20th Nov 20
Margin: How Stock Market Investors Are "Reaching for the Stars" - 20th Nov 20
World’s Largest Free-Trade Pact Inspiration for Global Economic Recovery - 20th Nov 20
Dating Sites Break all the Stereotypes About Distance - 20th Nov 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Gold $8,500 Now Possible, IMF Warns American on “Exorbitant Privilege”

Commodities / Gold and Silver 2011 Jul 29, 2011 - 07:42 AM GMT

By: GoldCore

Commodities

Best Financial Markets Analysis ArticleGold is trading at USD 1,615.20, EUR 1,132.70, GBP 991.92 and CHF 1,293.10 per ounce. Gold’s London AM Fix was USD 1613.75, EUR 1129.76, GBP 991.67 (10:41 GMT). Gold is set to finish a turbulent July higher showing its safe haven attributes again. Gold is higher in all fiat currencies month to date and is 7.6% higher in U.S. dollars.


Gold is flat in dollars and slightly higher in euros and British pounds. The pound is weaker after poor UK consumer sentiment figures underlined the risk of another UK recession. Global equities have remained reasonably robust despite the continuing drama in Washington regarding the debt ceiling negotiations.

Cross Currency Rates

Asian equities were quite resilient and only had marginal losses overnight (Nikkei -0.69%, Hang Seng -0.53%, STI +0.1% Shanghai -0.3%, Sensex -0.19%, Kospi -1.05%).

Similarly European equity indices while lower are reasonably robust despite the continuing political failure in Washington overnight to reach a deal. The FTSE is 1.02% lower and the CAC and DAX 1% and 1.4% lower respectively.

The Italian 10 year has risen to 5.91% and Irish 10 year yields have risen to 10.83%.

While US debt markets remain calm with little move up in yields, it must be remembered that the Federal Reserve has been buying US treasuries (with digitally created money) to lower overall interest rates and thus stimulate lending and this may be artificially depressing US interest rates.

XAU-US Dollar Exchange Rate

A U.S. default remains highly unlikely – unless American politicians continue to play Russian roulette for the sake of power.

The more challenging and real risk is that posed by the coming downgrade or downgrades of US debt, the threat to the dollar as global reserve currency and continuing currency depreciation and debasement.

IMF Chief Warns America on “Exorbitant Privilege”
New IMF Chief Christine Lagarde has warned overnight that the global reserve currency status of the dollar is at risk due to the “worrisome” US debt debate.

XAU-EUR Exchange Rate

Failure by the United States to raise the debt ceiling would likely lead to a decline in the U.S. dollar and raise "doubts" among those using it as a reserve currency, Lagarde said.

"One of the consequences could be a decline of the dollar as a reserve currency and a dent in people's confidence in the dollar."

The U.S. currency has had an “exorbitant privilege because it was the reserve currency that most central banks had,” Lagarde said in an interview on PBS’s “Newshour” yesterday. “If there was a dent in this exorbitant privilege and the confidence that most people have towards the dollar, it would probably entail a decline of the dollar relative to other currencies.”

The use of the “exorbitant privilege” phrase by the former French finance minister is important and not an accident.

It echoes the former French President, Charles de Gaulle’s comment regarding the dollar being “America’s exorbitant privilege” at a landmark press conference in 1965 that led to the end of the London gold pool or government cartel which attempted to keep the gold price fixed at $35 per ounce.

The Bretton Woods Agreement had conferred upon the U.S. significant economic and monetary advantages (which it enjoys to this day) when it was agreed that the US dollar would be the world's reserve currency replacing the British pound, which performed this function for over 100 years due to the classical gold standard.

XAU-GBP Exchange Rate

This made the dollar “sovereign” among currencies and conferred significant privileges deniedother currencies.

French President Charles de Gaulle challenged America’s exorbitant privilege in 1965 and extolled the virtues of gold as money and as a reserve currency: "Any workable and acceptable international monetary system must not bear the stamp or control of any one country in particular. Truly, it is hard to imagine any standard other than gold. Yes, gold, whose nature does not alter, which may be poured equally well into ingots, bars, or coins, which has no nationality, and which has, eternally and universally, been regarded as the unaltered currency par excellence ..."

Lagarde’s comments echo those of President Sarkozy in 2007 when he told George Bush and the Congress that "the dollar cannot remain solely the problem of others.” . . . “If we're not careful monetary disarray could morph into economic war. We would all be its victims."

Lagarde’s comments suggest that the IMF is considering or has plans for an alternative reserve currency.

The comments echo those of other G10 leaders and especially the Russians and Chinese who have been increasingly vocal about the risks posed to the dollar. Indeed, Putin recently called the US a “hooligan” for flooding the world with printed dollars.

Leading international financiers such as George Soros and Warren Buffett have also warned about the risks posed to the dollar. Although Buffett has remained quiet about the risk more recently.

Cazenove’s Griffiths Says “Essential to Own Gold” - $8,500/oz Is Possible
Interviewed yesterday by King World News, Cazenove Capital's highly respected strategist, Robin Griffiths, remarked that you “have to own” gold. He said that the real inflation adjusted high from 1980 (using the more accurate RPI) was over $8,500 per ounce and gold could reach that level in the coming years.

He said that silver was volatile but would likely outperform gold.

Griffiths said in January that fiat currencies were being "printed into oblivion," and so not owning gold is "a form of insanity."

He continued saying that not owning gold “may even show unhealthy masochistic tendencies, which might need medical attention."

Robin Griffiths is highly respected. He was chief technical strategist with HSBC for over 20 years and has 44 years investment experience and is considered to be one of the top strategists in the world.

Cazenove Capital is one of the oldest investment houses in the world tracing its origins back to the 17th century and the company was founded in 1823. It manages money on behalf of blue blooded clients and is widely believed to manage some of the British Royal family’s wealth.

Other News
Citigroup have said that gold looks like it could go higher and does not look overvalued. Citigroup said that $5,000/oz was not likely to be reached unless there was a “meaningful deterioration in the macroeconomic environment.”

UBS said this morning that gold sales to India for May are up 161% year-on-year – another sign of robust demand from India.

For the latest news, commentary, charts, infographics and videos on gold and financial markets follow us on Twitter.

SILVER
Silver is trading at $39.59/oz, €27.77/oz and £24.32/oz.

PLATINUM GROUP METALS
Platinum is trading at $1,776.35/oz, palladium at $821/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