Gold hits 6-1/2 month high after central bank stimulus

By Jan Harvey

LONDON | Fri Sep 21, 2012 7:48pm IST

(Reuters) - Gold prices rose 1 percent on Friday to 6-1/2 month highs as expectations that central bank measures to stimulate growth would boost liquidity, fuel inflation and keep a lid on interest rates put the metal on track for a fifth straight week of gains.

A firmer tone across the financial markets also supported bullion. European shares and the euro rose, while oil rebounded from a 1-1/2 month low, as investors moved back into markets still feeling the benefits of central bank support measures. <MKTS/GLOB>

Spot gold hit a peak of $1,787.20 an ounce and was up 0.8 percent at $1,771.14 an ounce at 9:44 a.m. EDT (1344 GMT), while U.S. gold futures for December delivery were up $14.00 an ounce at $1,784.20.

The Bank of Japan was the latest central bank to unveil easing measures this week, after the Federal Reserve announced an aggressive asset purchasing program earlier this month and the European Central Bank unveiled plans to buy bonds of the bloc's heavily indebted countries.

The Fed move, a third round of so-called quantitative easing which will see it buy $40 billion a month in mortgage-backed debt until the outlook for the labor market improves, lifted spot gold by 2 percent in a single day.

"QE3 was a bit of a game-changer for a lot of people. People are having to think seriously about where they put their money," Ross Norman, chief executive of bullion broker Sharps Pixley, said. "Gold does seem to have taken on a life of its own now. We think we might see $1,800 in the next couple of weeks or so."

source here   >>

Gold hits new high of Rs 32,450 on firm global cues

Tracking strong global cues, gold on Saturday soared by Rs540 per ten grams to fresh all-time high of Rs32,450 in the national capital.

Prices of gold (99.5 purity) in Kolkata increased by Rs620 to Rs32,425, while rates in Chennai rose by Rs710 to Rs32,325 per ten grams. In Mumbai, the precious metal's rates surged by Rs605 to Rs31,955 on Saturday.

"The domestic gold prices are rising purely due to global development. After the announcement of potentially unlimited bond-buying by the European Central Bank (ECB) and unfavourable non-farm pay roll data of the US, international gold prices shot up," SMC Comtrade chairman and managing director DK Aggarwal said.

Global prices rallied as poor non-farm employment data indicated serious job problems in the US and its weak economic situation, traders said.

The US data also brightened chances of announcement of stimulus package by the US Federal Reserve in its forthcoming meeting, Aggarwal said, adding that these developments are driving prices of gold and silver.

Gold prices in New York shot up by $34 to $1,735.30 an ounce, its biggest single-day gain since February 29.

Aggarwal said there is not much of physical demand of gold in the country. However, jewellery demand is expected to pick in the wedding and festive season.

Echoing similar views, All India Sarafa Association General Secretary Surender Jain said: "Local gold price, which moves in tandem with global rate, is expected to see more peak levels in coming days."

In the domestic market, silver prices also rose by Rs2,100 to Rs61,800 per kg on increased offtake by industrial units and coin makers.

source here  |  Sat Sept 8, 2012

Negative Real Interest Rates Argue for New Highs in Gold

At any given point in time there are several variables that affect the price of gold. There are times when gold’s price is driven by its perceived association with inflation and other times it’s seen as a “safety asset” or even a global currency. One variable in particular that was a constant driver of gold’s bull market in the 1970s was the presence of negative real interest rates—where inflation rates are higher than nominal interest rates—which means savers who park their cash at the bank are seeing their purchasing power eroded. The power of negative real interest rates as a major catalyst for gold has also been dominant in gold’s secular bull market this time around and currently argues for new highs. However, the USD’s strength at present has been keeping gold in check. That may soon change if the Euro begins to stabilize and money flows back out of the USD.

Gold Variables

As mentioned above, one of the strongest correlations to the price of gold is not the USD but actually real interest rates. This can been seen below in which the top panel shows the open interest for gold futures contracts, the middle panel shows gold along with real interest rates (inverted in red), and the bottom panel shows the USD Index along with gold (USD Index shown inverted for directional similarity). Real interest rates in the middle panel have had the most consistent relationship with gold over the years but that changed in the middle of 2011 when the USD Index began to rise (fall in bottom panel below), despite real interest rates falling to new lows which suggested gold should be hitting new highs.

Source: Bloomberg

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Casino Capitalism Centers failures makes gold stronger.

Published on Aug 18, 2011 by Euronews - The world financial markets have again been taking a beating due to renewed worries about recession and Europe's debt crisis. European bourses suffered their biggest daily fall in two and a half years - with the top 300 shares down five percent at the close. The sell off was on both sides of the Atlantic - with the Dow Jones Industrial Average down around four percent for most of the session - made worse by a decline in factory activity in the US Mid-Atlantic region and an increase in the number of Americans claiming new jobless benefits last week.

Gold Hits New Record After Chavez Announces Plan To Pull Reserves From US, European Banks

Thursday, August 18, 2011

Despite a report from the World Gold Council showing that demand for the precious metal has subsided, gold soared to a new record high today on the back of another stock market plunge and an announcement from Venezuelan President Hugo Chavez that the country’s gold mining industry would be nationalized.

Gold touched a new record high of around $1827 dollars an ounce as the Dow Jones plunged by 500 points in early trading.

Gold soared to new heights even in the face of aWorld Gold Council report that said demand was down 37% year on year.

However, the report noted that there was “increasing acceptance of higher price levels” globally, which explained a modest 3% fall in recycling gold on the supply side.

Although today’s new high for gold is obviously being driven by a flight to safety as the stock market crumbles, Hugo Chavez’s announcement last night that he was to nationalize the country’s gold mining industry undoubtedly has had an impact on today’s trading.

Prison Planet - read full posting

2011 Gold Rush Is On

VOAvideo on Aug 11, 2011With the price of gold hovering around $1,800 an ounce, gold buyers haven't been this busy in many years. In New York, the buyers and traders of gold have a standing room only business. VOA's Bernard Shusman in New York City reports.

Gold New High

Thurs 11 Aug 2011

Market jitters cause Thai gold rush.

Uploaded by AlJazeeraEnglish on Aug 10, 2011 - Thailand is taking part in the global gold rush. Concerns over the global recession and debt crisis in Europe and the US prompted many Thais to buy gold as a safe haven amid market jitters across the region. There is so much demand for it that the Thai Gold Traders Association says some shops have run out. Al Jazeera's Veronica Pedrosa reports from the capital Bangkok.

Gold Price New High.

Apr 25, 2011 - Is US Greenbakcs going down the drain & taking all paper monies with it?

GOLD RECORD HIGH

Monday Apr 18, 2011

Back Toward the Gold Standard?

World Bank President Supports New Gold Standard :

Robert Zoellick, the president of the World Bank writes:

“The system should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values.”

That could ignite a firestorm of controversy between economists who see a gold standard as a global stabilizer and those who see it as a job and growth-killer. What could invite more consensus is Zoellick’s call to reengineer the global financial architecture.

“The development of a monetary system to succeed ‘Bretton Woods II’ launched in 1971, will take time. But we need to begin. The scope of the changes since 1971 certainly matches those between 1945 and 1971 that prompted the shift from Bretton Woods I to II.”

Read full report:

Gold surge - US & Russia..

RT | October, 2010, 10:21

The gold price has surged over the course of this year to beyond $1320 an ounce, with investor interest growing as concerns about currencies mount.

Gold futures, warrants, gold exchange traded funds, gold-mining shares – there are many ways invest in gold. But none offer the sheer sense of possession that having a bar in your hands does. Otkryitie analyst, Vladimir Savov says this can allow investors to strip out thinking about company management and hedge books, and simply focus on price.

Currency Wars, The Point of No Return.

September 24, 2010:

Gold price hits new record high

FOREX GOLD INDEX(PM FIX) $/OZContinue reading the main story

The price of gold hit a record high on Tuesday, with analysts giving a number of reasons for its rise.

Both the price of the actual metal and the price for buying it at a future date rose more than 2% to $1,274.75 an ounce.

It was the biggest one-day gain for the commodity in four months.

One of the factors spurring investors is gold's traditional role as a so-called "safe-haven" investment at times of economic uncertainty.

On the physical market, demand for both bullion and jewellery has risen ahead of the seasonal Indian wedding period and the Hindu religious festivals that begin in September

BBC News - 14 September 2010

Gold new high in America!

June 18, 2010 — Ted Anderson drops by to talk with Alex about why gold is taking off the way it is and how far it may go. Now is the time to buy gold while you can before it goes to the next level.

Gold Advances to a Record in New York, London on Haven Demand.

By Nicholas Larkin

June 8, 2010 (Bloomberg) -- Gold rose to a record in New York and London as investors sought an alternative to currencies amid mounting concern over Europe’s debt crisis.

Bullion also hit highs in euros, sterling and Swiss francs after the region’s common currency yesterday slipped to its lowest level in more than four years against the dollar amid speculation that debt-cutting measures by European nations will slow growth. European equities fell and Fitch Ratings said the U.K. must deepen budget cuts to protect its top credit rating.

“It shows low confidence in the euro zone,” said Bernard Sin, head of currency and metals trading at bullion refiner MKS Finance SA in Geneva. “There’s no confidence in euros, dollars and no confidence in other currencies. The only solution is to be on the safer side, which is gold.”

Gold strikes new record high on Europe debt woes

Wed, May 12, 2010 at 11:43 | Source : Reuters

Gold struck another record high above USD 1,230 an ounce on Wednesday on safe haven buying as investors bet the euro zone debt crisis could spread beyond Greece.

Jewellers cashed in on the rally and dealers noted a pick up sales of scrap in Asia, which could curb further gains. But any correction could be limited as a USD 1-trillion European rescue package had done little to ease fears of euro zone debt contagion.

"Paper trading" causes Global food bubble!

REASON FOR FOOD HIKE : DRIVEN BY FINANCIAL SPECULATION IN THE COMMODITY FUTURES. not supply & demand factors. Basically to compensate losses due to sub-prime market.

Gold hits yet another record high

The price of gold has struck yet another record high as the dollar continues to weaken.

Renewed vigour in early trading in London pushed gold to a new high of $1,217.23 an ounce. It has hit a number of new highs in recent weeks.

Other precious metals have also rallied strongly. Silver, at $19 dollars an ounce, is 5% off its all-time high.

Demand for gold is being driven by two main factors - a weak dollar and investors' appetite for safe assets.