Chart usGOLD   Chart usSILVER  
 
Food for thought
There are one hundred men seeking security to one able man who is willing to risk his fortune
JP Getty  
Search for :
LATEST NEWS  :
MINING STOCKS  :
Subscribe
Write Us
Add to Google
Search on Ebay :
PRECIOUS METALS (US $)
Gold 1308.184.36
Silver 20.670.13
Platinum 1481.25-2.00
Palladium 880.202.45
WORLD MARKETS
DOWJONES 1698326
NASDAQ 4445-5
NIKKEI 1561889
ASX 558111
CAC 40 43539
DAX 961820
HUI 2432
XAU 1021
CURRENCIES (€)
AUS $ 1.4292
CAN $ 1.4523
US $ 1.3437
GBP (£) 0.7926
Sw Fr 1.2150
YEN 137.0100
CURRENCIES ($)
AUS $ 1.0638
CAN $ 1.0808
Euro 0.7442
GBP (£) 0.5899
Sw Fr 0.9043
YEN 101.9640
RATIOS & INDEXES
Gold / Silver63.29
Gold / Oil12.87
Dowjones / Gold12.98
COMMODITIES
Copper 3.23-0.01
WTI Oil 101.62-0.05
Nat. Gas 3.760.00
Market Indices
Metal Prices
RSS
Precious Metals
Graph Generator
Statistics by Country
Statistics by Metals
Advertise on 24hGold
Projects on Google Earth
End Currency Wars With Gold Standard? –Bloomberg Interview and FT Op-ed
Published : February 13th, 2013
1047 words - Reading time : 2 - 4 minutes
( 0 vote, 0/5 ) Print article
 
    Comments    
Tweet

By Paula Flood


Today’s AM fix was USD 1,641.75, EUR 1,225.28 and GBP 1,053.15 per ounce.
Yesterday’s AM fix was USD 1,663.50, EUR 1,242.16 and GBP 1,057.94 per ounce.

Silver is trading at $30.94/oz, €23.13/oz and £19.92/oz. Platinum is trading at $1,719.25/oz, palladium at $764.00/oz and rhodium at $1,200/oz.


Cross Currency and Precious Metals Table – (Bloomberg)

Gold fell $18.90 or 1.13% yesterday on closing at $1,649.70/oz. Silver slipped to a low of $30.81 and finished with a loss of 1.53%.


Gold in USD, 1 Year – (Bloomberg)

Gold has dropped to its lowest level in over a month on low volumes due to Asia’s Lunar New Year holiday which has markets closed in Hong Kong, China, Malaysia and Taiwan today.  

Prices remained low despite the announcement that North Korea had detonated an atomic warhead in its 3rd underground nuclear test. Geopolitical risk remains and should the situation on the Korean peninsula deteriorate then gold should receive a safe haven bid. 

G20 finance ministers and central bankers are meeting in Moscow this week and market players are waiting to see what clues are given for the stability of the euro.


XAU/EUR, 1 Year – (Bloomberg)

Gold continues to flow from the west to east. Reuters reports that U.S. Commerce Department data showed U.S. exports of nonmonetary gold, which excludes central bank transactions, climbed by 43% to $4 billion in December from the prior month. 

That's the highest total and the largest month-on-month jump in U.S. private gold exports since September 2011, when gold rallied to a record nominal high over $1,920/oz. Hong Kong accounted for nearly half of the $4 billion.

The Group of Seven nations have reiterated their commitment to market-determined exchange rates and said fiscal and monetary policies must not be directed at devaluing currencies.

Actions speak louder than the words of the communiqué and the reality is that the fiscal and monetary policies of many members of the G7, and especially the U.S., are directed at devaluing currencies through competitive currency devaluations.

Concerns about the devaluations and the growing risk of a severe bout of inflation have led to calls for a return to fixed exchange rates and a gold standard.

Bloomberg’s Trish Regan and Adam Johnson interviewed TCW Group’s Komal Sri-Kumar and Bank of New York Mellon's Michael Woolfolk about the risks from currency wars on Bloomberg Television's "Street Smart."

Trish Regan asks whether there is a danger that “we have massive inflation worldwide for years to come?”

The answer is yes and both agree that inflation is a real risk as is a loss of credibility by central banks.

Komal Sri-Kumar is asked what the solution is and is asked about his Op-Ed in The Financial Times in which he calls for a return to a gold standard.

He replies that a gold standard today would be no different to “how good it was from 1945 to 1971.”

“It worked, the world was in prosperity, there was economic growth and there was clearly certainty in terms of what exchange rates were.”

He warns that “even in the short term there is nothing to be gained by devaluing. We have tried that in the United States. We have been devaluing through QE1, QE2 and QE Infinity, the most recent one ... we don’t have sustained economic growth.”


XAU/GBP, 1 Year – (Bloomberg)

In his Op-Ed in The Financial Times, Sri-Kumar called for gold to be fixed just above today’s levels at $1,675/oz:

“A first step would be to fix the price of gold in dollar terms at near its current level of $1,675, with assured convertibility. To ensure that currencies are neither over- nor undervalued, the consumption basket (or the hypothetical loaf of bread) should be valued at roughly similar levels in different currencies at fixed rates against the dollar.”

Bank of New York Mellon's Michael Woolfolk says that you could back the dollar with gold as “the value of gold would have to be astronomically high to back the money supply”.

“At the time of the 1960’s a dollar was a unit of currency and $35 bought an ounce of gold, but the velocity of money is so much greater now the price would need to be higher”, Columbia University educated Kumar said.

The benefit of the gold standard was that there was a fixed exchange rate. 

“If we went back to the gold standard you would be looking at a global recession,” says Michael Woolfolk. “We don’t have enough gold and it’s not growing fast enough”. 

Kumar disagrees that by using a gold standard and that having it fixed exchange rates, the certainty would increase global trade and overall global production.

“The price of gold would have to be astronomically high, plus you couldn’t guarantee that all countries have different interest rates set”?

“Michael, I don’t think the inflation would be much higher if the country submits itself to a fixed exchange rate” said Kumar.

Sri-Kumar  concluded the following:
During the Bretton Woods period the The Vietnam War pushed the inflation up as the U.S. had to print dollars to finance a war. Then Nixon abolished the gold link in August of 1971 was death net. After that, money supply increased by 10% in one year and this was not consistent with the fixed exchange rate. If you had not done that we would have avoided the push up in inflation in 1973-1975 and the subsequent increase in oil prices in 1979.

This debate shows how gold is being seen as money and as a safe haven asset again, and shows the silly nature of the ongoing suggestions that gold is a ‘bubble’.

Data and Statistics for these countries : China | Hong Kong | Malaysia | Taiwan | Vietnam | All
Gold and Silver Prices for these countries : China | Hong Kong | Malaysia | Taiwan | Vietnam | All
Tweet
Rate :Average note :0 (0 vote)View Top rated
Previous article by
Mark O'Byrne
All articles by
Mark O'Byrne
Next article by
Mark O'Byrne
Receive by mail the latest articles by this author  
Latest comment posted for this article
Be the first to comment
Add your comment
TOP ARTICLES
Editor's picks
RSS feed24hGold Mobile
Gold Data CenterGold & Silver Converter
Gold coins on eBaySilver coins on eBay
Technical AnalysisFundamental Analysis

Mark O'Byrne

Mark O'Byrne is executive and research director of www.GoldCore.com which he founded in 2003. GoldCore have become one of the leading gold brokers in the world and have over 4,000 clients in over 40 countries and with over $200 million in assets under management and storage.We offer mass affluent, HNW, UHNW and institutional investors including family offices, gold, silver, platinum and palladium bullion in London, Zurich, Singapore, Hong Kong, Dubai and Perth.
Mark O'Byrne ArchiveWebsiteSubscribe to his services
Most recent articles by Mark O'Byrne
7/28/2014
7/25/2014
7/24/2014
7/23/2014
7/22/2014
All Articles
Comment this article
You must be logged in to comment an article8000 characters max.
 
Sign in
User : Password : Login
Sign In Forgot password?
 
Receive 24hGold's Daily Market Briefing in your inbox. Go here to subscribe or unsubscribe.
Disclaimer