Close X Cookies are necessary for the proper functioning of 24hGold.com. By continuing your navigation on our website, you are accepting the use of cookies.
To learn more about cookies ...
EnglishFrench
Gold & Silver Prices in

Gold Acting as "Barometer" of Global Currency Devaluation, Nears $1300

IMG Auteur
 
Published : September 25th, 2010
659 words - Reading time : 1 - 2 minutes
( 0 vote, 0/5 )
Print article
  Article Comments Comment this article Rating All Articles  
0
Send
0
comment
Our Newsletter...

 

 

 

 

THE PRICE OF GOLD came within 80¢ of $1300 an ounce Friday morning in London, with front-month gold futures in New York breaching that level, as trader-room rumors said the central banks of both Japan and Switzerland were actively selling their own currencies to depress them on the forex market.

US crude contracts oil rose back above $75 per barrel. World stock markets rose as the Dollar fell on the currency market.

Silver prices broke fresh three-decade highs above $21.40 an ounce.

"There is not a country in the world that wants a firmer domestic currency," says Kamal Naqvi, head of commodity sales at Credit Suisse, speaking to the
Financial Times today.

"The result is devaluing currencies against hard assets, and gold is the obvious barometer of that. The thesis of competitive devaluation as a driver for gold has become much more accepted by the mainstream."

Just after lunchtime in Tokyo – which re-opened for business today after the autumnal equinox holiday – the US Dollar spiked almost ¥1 towards the ¥85.50 level achieved by last week's Bank of Japan intervention, now estimated around $21 billion.

The Dollar quickly fell back to unchanged, however, and the Bank didn't comment.

"There's also been talk that the Swiss National Bank is buying Euros this morning," said one London bullion dealer in a note, even as a new SNB survey said only a quarter of Swiss companies have suffered lower sales because of the rising Franc.

Eurozone investors wanting to buy gold today saw the price fall back towards €31,100 per kilo, while the single currency re-visited 24-week highs above $1.34 on the forex market.

By lunchtime in London, gold priced in Dollars stood 1.8% higher from last Friday's finish. The gold price in Euros stood 1% down for the week.

"There the danger of a protectionist backlash" if each of the world's big central banks seeks to depress their own currencies in "unilateral action", says
The Economist magazine today.

"It will also make it much harder to elicit further action from China, the country whose currency regime distorts the global economy most. The rich world needs reflating but the world economy also needs rebalancing. And that demands a weaker Dollar."

So far this year, the Yen has risen 9.5% against the Dollar. Kept inside a tight trading-band set by the People's Bank, in contrast, the Chinese Yuan has risen by only 1.4%.

In the first half of 2010, Beijing used some $20 billion of its $2.4 trillion foreign currency reserves to buy Japanese government bonds.

Beijing today denied a New York Times report that China is blocking exports of rare earth metals to Japan, but Tokyo's finance minister repeated the claim.

"[Coming] economic data will be closely scrutinized to get an idea about the timing of possible Fed action," reckons Commerzbank analyst David Schnautz, speaking to Bloomberg ahead of today's US Durable Goods Orders report, which showed a 1.3% drop in August from July.

In US Treasury bonds, now completing their strongest week's performance since the 'safe haven' buying of May's Eurozone debt crisis, "The Federal Reserve may be more active on the buy side," Schnautz's believes.

"We don't know how close they are to the trigger point" for fresh quantitative easing.

 

Adrian Ash

Head of Research

Bullionvault.com

 

You can also Receive your first gram of Gold free by opening an account with Bullion Vault : Click here.

 

 

City correspondent for The Daily Reckoning in London, Adrian Ash is head of research at BullionVault.com – giving you direct access to investment gold, vaulted in Zurich, on $3 spreads and 0.8% dealing fees.

 

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

  

 

 

<< Previous article
Rate :Average :0 (0 vote)
>> Next article
Latest comment posted for this article
Be the first to comment
Add your comment
Top articles
Latest Comments
Gold & Silver Market Morning
12:55end
If you trade XAU/RUB and have bought XAU using RUB, you should have closed your position as he advised. Then you should have switched, buying gold ...
Muslim terrorism, the left and t...
01:09Firebear1
All please understand this person was a Muslim,that was his believe! His character was that of a criminal as was shown by his action on the day and...
Napoleon vs. Cheney: "Interrogat...
18 Decwalmarde
Torture just put the moral line lower. Lets think about American exceptionalism. What we want ? we want to spread and defend that exceptio...
Napoleon vs. Cheney: "Interrogat...
18 Decwalmarde
Utilitarianism is bad philosphy. I'm also very disgust about torture. It will backfire in our face. We are now no better than ou...
Napoleon vs. Cheney: "Interrogat...
18 DecJosu O.5
I cannot overstate how important is that every american read this article. It's absolutely wonderful how you have summarized every aspect around to...
Muslim terrorism, the left and t...
18 Decend0
Does anyone still wonder why is Australia hotbed for second generation Muslim migrant radicalization? Does anyone still need an explanation on why ...
Gold & Silver Market Morning
17 Decsamking731
Gypsie, my take on what he's saying is on paper gold, not actual gold that you are holding in your hand. In that way, gold is gold, though Pandas ...
Gold & Silver Market Morning
17 DecGypsy1
You have me confused Julian. When you say "We believe that holders of gold in the Ruble. . . . ." I take it you are not talking about someone hold...
Most commented articlesFavoritesMore...
World PM Newsflow
ALL
GOLD
SILVER
PGM & DIAMONDS
OIL & GAS
OTHER METALS
Comments closed
Subscribe to 24hGold’s daily market briefing
  • Prices and data of precious metals in 119 currencies and world mining companies
  • Daily analysis of the economy, markets and more
  • Free, daily and indispensable
Stay informed, subscribe now !
* Your email will never be shared.