Silver is trading at $30.85/oz, €23.45/oz and £19.14/oz. Platinum is trading
at $1,563.00/oz, palladium at $658.75/oz and rhodium at $1,350/oz.
After moves down and then up, gold finished $2.60 or 0.16% higher in New York
yesterday and closed at $1,643.80/oz. Gold fell some $10 as the FOMC meeting
commenced prior to going positive.
Gold gradually eked out gains in Asian and early European trading prior to
seeing some weakness.
Cross Currency Table –
(Bloomberg)
Support for gold is at $1,612/oz and resistance is at $1,663/oz and
$1,684/oz.
Gold climbed on Thursday on concerns that the Fed could employ more QE in a
further attempt to stimulate the economy. The Fed said that the economic
conditions "are likely to warrant exceptionally low levels for the federal funds
rate at least through late 2014”.
Continuing ultra loose monetary policies and negative real interest rates
continue to support gold.
The Fed has already engaged in 2 rounds of asset purchases near a massive
$2.3 trillion, to drive down interest rates and in a vain attempt to stimulate
the US economy. QE helped push up both equity and commodity prices by providing
cheap money to investors who placed it in riskier assets.
Thus, QE is leading inflation pressures and there is a risk that the Fed,
like other central banks, continues to underestimate the risk of inflation.
Bernanke said US monetary policy was "more or less in the right place" even
though the central bank would not hesitate to launch another round of bond
purchases if the economy were to falter.
Investors will examine efforts by Europe to solve the debt crisis after ECB
President Mario Draghi called for a "growth compact" but put the blame on euro
zone governments to sort out their economies.
The eurozone debt crisis is far from resolved and the next stage of the
crisis could be even more volatile than the recent Greek saga.
Gold Standard Inevitable, Possibly Within Year - $10,000/oz
LoomsReuters TV have interviewed John Butler who says a return to
the gold standard is "inevitable" possibly as soon as within the year and
$10,000/oz gold is on the cards.
Jamie McGeever interviews Butler in the Goldsmith Hall in London about his
opinions propounded in his new book, ‘The Golden Revolution : How to Prepare
for the Coming Gold Standard.’
Butler has 18 years’ experience in the global financial industry, having
worked for European and US investment banks in London, New York and Germany.
The book says that the era of paper currency is coming to an end and a return
to a gold backed dollar is basically inevitable.
McGeever starts the interview by saying that far from gold being expensive at
$2,000/oz, gold may be “the bargain of a life time” especially “if the world
returns to some form of gold standard.”
Butler says that this “could happen as early as next year” due to BRIC
nations dissatisfaction with the dollar reserve standard, “they will start to
move formally back to gold”.
There are many ways that this can happen according to Butler including one
country becoming a first mover, surprising the world and the United States, by
pegging its currency to gold
He points out that Russia may be the country who could do precisely that.
This could lead to a run on the US dollar and financial assets and could see
the dollar lose 20% in 24 hours as investors pour into real assets such as oil
and gold. This could lead to a depression in the U.S.
There could be a Bretton Woods style “crisis meeting” where the U.S. decides
it must reinstate the gold standard or else the dollar “may lose its reserve
status entirely.”
Gold at $5,000/oz should happen and possibly over $10,000/oz in that scenario
as gold will be a “de facto monetary asset in cross border balance of payments
transactions”.
Reuters’ McGeever acknowledges how the “gold market is tiny” compared to
“trillions and trillions of dollars worth of cash and assets sloshing around the
world financial system.” He asks how can countries back “all of that” against
such a “tiny and finite amount of gold?”
Butler responds by saying that “the amount of gold is finite by weight or
volume, it is not finite by price.”
If gold is going to be remonetised it is entirely reasonable that “gold’s
price will rise by an order of magnitude.”
Butler correctly points out that if gold were to rise to over $10,000/oz then
in fact what you would have is a market capitalisation of gold, as it were,
vis-à-vis the money supply and credit volume generally which is in line with a
longer term comparison – it implies stability.
It is another must watch video and shows how consciousness
regarding the value of gold as a finite asset and currency is gradually shifting
with obvious ramifications for all who wish to protect and grow their wealth in
the coming years.
Far from gold being a speculative bubble, as suggested by less informed
economic experts and financial advisors, it may remain undervalued at below
$2,000/oz and may be destined to reach much higher levels as gold reasserts
itself as the global currency par excellence.
OTHER NEWS(Bloomberg) -- IShares Silver Trust
Holdings Unchanged at 9,552 Metric Tons
Silver holdings in the IShares
Silver Trust, the biggest exchange-traded fund backed by silver, were unchanged
at 9,552.14 metric tons as of April 25, according to figures on the company’s
website.
================================================================================
April 25 April 24 April 23 April 20 April 18 April
17
2012 2012 2012 2012 2012
2012
================================================================================
Million Ounces 307.108 307.108 307.108 307.108 309.827
309.827
Daily change 0 0 0 -2,718,365 0
1,456,383
--------------------------------------------------------------------------------
Metric tons 9,552.14 9,552.14 9,552.14 9,552.14 9,636.69
9,636.69
Daily change 0.00 0.00 0.00 -84.55 0.00
45.30
Gold for June delivery in New York rose 0.2 percent to $1,644.80 an ounce at
8:19 a.m. in Melbourne, while bullion for immediate delivery was little changed
at $1,644.13 an ounce.
The futures declined yesterday after the Federal Reserve reduced its forecast
for unemployment and refrained from providing more stimulus measures at the
conclusion of a two-day meeting, easing concern that inflation will accelerate.
Silver for July delivery climbed 1.1 percent to $30.76 an ounce
