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Gold is trading at USD 1,719.00, EUR 1,283.70, GBP
1,095.30, CHF 1,582.40, JPY 135,510 and AUD 1,689.0 per ounce.
Gold’s London AM fix this morning was USD
1,712.00, GBP 1,094.49, and EUR 1,281.34 per ounce.
Yesterday's AM fix was USD 1,739.00, GBP 1,105.81, and
EUR 1,297.28 per ounce.
 
Cross Currency Table
Gold edged higher in euros, pounds, dollars and all
currencies today after the European Union leaders failed overnight to get all
of the bloc's 27 members to agree a change in the EU treaty allowing fiscal
integration as the ‘decisive’ summit in Brussels ended its first
day in the early hours Friday.
Gold traded higher after the ECB interest rate cut yesterday, prior to sharp selling that came into the
market at 1335 GMT. This led to gold falling 2% on the day and it is now down
1.3% on the week – again outperforming many equity indices.
Market News International (MNI) reported that market
sources said that the Bank for International Settlements, the Bank of England
and the Federal Reserve have been “good sellers of gold” after it
had popped to a fresh session high of $1,755.90/oz.
The MNI report has not been explored and there have not
been any official denials of official selling.
From a trading perspective there is at least a ring of
truth to the MNI report as the sharp fall in the gold price was
counterintuitive given there was no negative gold news and indeed the news
was bullish with significant risk ahead of the EU summit and continued ultra loose monetary policies and negative real interest
rates.
Given the scale of the coordinated intervention in
markets by central banks recently one would have to be completely naïve
to dismiss the report out of hand. There is of course the historical
precedent of the London Gold Pool which ended in failure.
However, before jumping to conclusions it would be good
if the MNI report was looked at and some questions asked - in the finest
traditions of journalism.
Markets reaction to the euro summit fudge was not as
bad as some of the ‘end of the world in 9 days if no agreement’
theorists who fear mongered in recent days. Many of the ‘9 day’
doom merchants had banking and political interests and agendas.
European indices are tentatively higher despite losses
in Asia.
At the end of the day, agreement or no agreement the
fundamental challenge facing Europe and the developed world is humungous
levels of debt in the banking sector and in the shadow banking system
(derivatives with a value in the hundreds of trillions) and real global
financial system.
The root cause of the problem is this debt, as has been
pointed out by many for months and years now. The problem cannot be solved by
socializing the debt and piling public debt on top of this private banking
debt.
As long as the official policy response is the printing
and electronic creation of trillions of dollars, euros and pounds and
‘bazooka’ style currency debasement remains the monetary panacea
du jour, there will be no real resolution of this crisis.
Therefore, fiat currencies will continue to be debased
and fall in value versus gold.
Myopic markets continue to have the attention span of a
goldfish with the sole focus on the Eurozone crisis again in recent days
while completely ignoring the global fiscal titanic as seen in the appalling
finances of Japan, the UK and the US.
The iceberg approaches and we only see the tip of the
iceberg.
The total net cost of the Federal Reserve’s
bailout alone is now estimated at an incredible $29.616 trillion according to
research from the Levy Economics Institute (see commentary).
The global debt crisis is not a short term phenomenon
rather it is a medium and long term phenomenon that will challenge us for
years. No magic wand solution from central bankers or politicians is
possible.
One UK analyst made the witty comment this morning that
the UK is “as isolated as someone left on the dock in Southampton as
the Titanic sailed away.”
Witty, however it ignores the fact that this crisis is
very close to or already in the early stages of contagion and very close to
another Lehman Brothers systemic ‘event’. The UK and the massive
liabilities in the City of London are very much part of the global debt
titanic.
These huge fiscal and monetary challenges remain the
reason why the vast majority of investors and savers are being prudent in
having a healthy allocation to gold for the foreseeable future.
Gold will continue to reward and protect prudent
investors and savers from negative real interest rates and global currency
debasement.
For breaking news and commentary on financial markets
and gold, follow us on Twitter.
SILVER
Silver is trading at $31.83/oz,
€23.84/oz and £20.33/oz
PLATINUM GROUP METALS
Platinum is trading at $1,487.75/oz, palladium at
$666.00/oz and rhodium at $1,500/oz.
NEWS
(Bloomberg)
Gold Analysts Most Bullish in Month on Debt Crisis
(RTT)
Gold Edges Up Amid Flat Dollar
(Reuters)
Gold steady as hopes fizzle on EU summit
(Reuters)
Britain isolated as Europe splits on fiscal union
COMMENTARY
(RitzHolz)
Bailout
Total: $29.616 Trillion Dollars
(CNBC)
Video: GoldCore "Gold
is Hedge Against Monetary & Systemic Risk"
(The Street.com)
Video - GoldCore Interview
- Why Gold is Still a Safe Haven
(KWN)
Embry - $2,500 to $3,000 Gold Could Send Silver to
$250
(Zero Hedge)
MNI Reports Coordinated Central Bank Intervention
Sends Gold Lower Intraday
Mark
O’Byrne
Goldcore
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