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

Greece Debt Deal: "Kicking Giant Beer Keg Down Road Risks Destroying The Road"

IMG Auteur
Published : February 21st, 2012
1160 words - Reading time : 2 - 4 minutes
( 0 vote, 0/5 )
Print article
  Article Comments Comment this article Rating All Articles  
0
Send
0
comment
Our Newsletter...
Category : GoldWire

 

 

 

 

Gold’s London AM fix this morning was USD 1,737.00, EUR 1,313.12, and GBP 1,097.98 per ounce.


Yesterday's AM fix was USD 1,729.50, EUR 1,307.36, and GBP 1,090.82 per ounce.


Gold rose to its highest in a week today after euro zone policymakers sealed an agreement for a second debt deal with Greece. Gold remained flat at $1,736/oz in Asian trading after the deal was reached but then saw some buying which saw gold quickly rise to $1,740/oz and then creep up to over $1,743/oz.



Cross Currency Table – (Bloomberg)


U.S. gold rose 1% from Friday's close to $1,743.5 following the Greek bailout, catching up with gains in cash prices after the U.S. market was shut on Monday for a public holiday yesterday. Gold subsequently fell back to $1,737/oz in mid morning European trade.


Asian stocks were mixed and European indices are lower. This is either a case of ‘buy the rumour, sell the news’ or maybe market participants are beginning to get nervous regarding successive efforts at kicking the much abused can down the road and are nervous about other highly indebted industrial nations.


Gold has consolidated between $1,700 and $1,750 in the past two weeks as Greece has struggled to avoid default which could lead to contagion in the euro zone.


Euro zone finance ministers sealed a 130 billion euro ($172 billion) ‘bailout’ for Greece overnight to avert a chaotic default and likely contagion after persuading private bondholders to take greater losses and Athens to commit to brutal spending cuts.


The decision may help Athens resolve its immediate payment needs, but Greece still faces a very bleak financial and economic outlook in the coming years.


With elections tentatively scheduled in April, Greek politicians may become increasingly wary of standing behind the measures over popular outcry.


Those who have been correct about the crisis in recent years question whether a new Greek government will stick to the deeply unpopular program after elections due in April and believe Athens could again fall behind in implementation, prompting lenders to pull the plug once the eurozone has stronger financial firewalls in place.


The much used phrase "kicking the can down the road" underestimates the risks being created by European and international policy makers. Some have rightly warned that we will likely soon run out of road.


Rather than "kicking the can down the road" what politicians in Europe, in the U.S. and internationally are actually doing is "kicking a giant beer keg down the road".


The giant beer keg is the continual resort to cheap money in the form of ultra loose monetary policies, QE1, QE2, QE3 etc, money printing and electronic money creation on a scale never seen before in history.


The road is our modern international financial and monetary system.


The risk is that attempting to kick the giant beer keg down the road will lead to many broken feet and a destroyed road.


A European, US, Japanese and increasingly global debt crisis will not be solved by creating more debt and making taxpayers pay odious debts incurred through massively irresponsible lending practices of international banks.


The likelihood of continuing massive liquidity injections by the ECB next week and in the coming weeks will help keep the opportunity cost of holding bullion the lowest it has ever been and likely contribute to higher bullion prices especially in euro terms in the coming months.



XAU-EUR Exchange Rate 2 Days – (Bloomberg)


While the euro strengthened against the dollar, gold priced in euros fell initially but has edged marginally higher and gold is trading at €1,313/oz.


For breaking news and commentary on financial markets and gold, follow us on Twitter.


OTHER NEWS
(Bloomberg) -- Gold Trading Rose 1% in January as Silver Declined, LBMA Says
Gold trading increased 1 percent to an average of 22.2 million ounces a day in January compared with a month earlier, the London Bullion Market Association said today in an e-mailed report.


Silver trading fell 24 percent to a daily average of 149.2 million ounces, the lowest level since March, the LBMA said.


(Bloomberg) -- The J.P. Morgan View: The return of Asset Reflation
• Asset Allocation –– All assets are beating cash YTD, showing the power of asset reflation, which is being reinvigorated by massive liquidity injections from central banks across the world. We stay long the higher risk-beta asset classes, equities, gold and credit. • Economics –– World growth forecasts remain unchanged, but higher oil prices temper the upside risk bias from recent PMIs. • Fixed Income –– Government yields still out of kilter with improving activity data and the equity rally. • Equities –– Staying long and OW DAX and EM. • Credit –– We stay with overweights in EM $ sovereigns, US HG and US HY. • Foreign exchange –– Our main non-consensus calls for Q2 are a stronger euro and yen, at $1.34, and ¥73, versus the USD. • Commodities –– OPEC should be able to offset any lost Iranian exports but uncertainty around this is pushing oil prices higher. The rally in riskier assets reached a pause mode over the past week on higher oil prices.


(Bloomberg) -- Hedge Funds Boost Bullish Wagers to Five-Month High: Commodities
Hedge funds increased commodity bets to the highest in almost five months on signs that a rescue plan for Greece and faster U.S. growth will buoy demand as supplies shrink for everything from soybeans to copper.


Money managers boosted net-long position across 18 U.S. futures and options by 2.9 percent to 956,313 contracts in the week ended Feb. 14, the most since Sept. 20, government data show. Soybean wagers jumped 29 percent to a five-month high. Silver holdings rose for a seventh straight week, the longest advance in almost three years.


The Standard & Poor’s GSCI Spot Index of 24 commodities reached a six-month high on Feb. 17 as euro-area leaders expressed confidence that an agreement on a Greek bailout can be reached. Reports last week on U.S. housing and manufacturing beat analysts’ forecasts, and claims for jobless benefits dropped to a four-year low. Investments in raw-material futures have jumped 13 percent this year, exchange data show.


SILVER
Silver is trading at $33.71/oz, €25.47/oz and £21.33/oz.


PLATINUM GROUP METALS
Platinum is trading at $1,657.97/oz, palladium at $693.04/oz and rhodium at $1,500/


NEWS
(Reuters)
Gold hits 1-1/2-week high after Greece deal


(Bloomberg)
Europe Stocks Drop After Greek Bailout Deal


(MarketWatch)
Gold trades flat after Greek aid approved


(Reuters)
Brent hovers near $120, buyers take less Iran oil


(CBS News)
Colorado bill would legalize gold, silver currency


COMMENTARY
(MoneyWeek)
The Inconvenient Truth About Gold


(Precious Metals Research)
Do macroeconomic news releases affect gold and silver prices?


(Reuters)
Singapore the next gold hub?


(Mineweb)
AngloGold CEO says Warren Buffett just doesn't understand gold and gold investors


(King World News)
Eveillard - Fear of Contagion, This is the End of the Road


(GoldSeek)
The Cancer of Debt and Deficits


(FT)
The Drift Towards War With Iran


Mark O’Byrne

Goldcore

 

 

Companies Mentionned : Anglogold | Platinum Group Metals |
Data and Statistics for these countries : Greece | Singapore | All
Gold and Silver Prices for these countries : Greece | Singapore | All
<< 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
Chinese Copper Elephant
21 Decovertheedge
If some of the central African countries, such as Nigeria, get their politico-economic acts together, then increased demand for base metals, especi...
41 Facts about Central Banks no ...
20 Decprljr
Common sense and logic dictate that if this was taught in schools it would not exist as it has these past 100 yrs. The monetary system is a CON a L...
41 Facts about Central Banks no ...
19 Decsamking73
I'm not sure that much was taught about the central banking system back when I was in school...25 + years ago. At least not the important parts.
Gold & Silver Market Morning
19 Decend
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...
19 DecFirebear1
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...
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.