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Today’s AM fix was USD 1,772.50, EUR 1,359.70 and
GBP 1,093.53 per ounce.
Yesterday’s AM fix was USD 1,730.50, EUR 1,339.81 and GBP 1,073.64 per
ounce.
Silver is trading at $34.64/oz,
€26.53/oz and £21.43/oz. Platinum is
trading at $1,700.20/oz, palladium at $695.75/oz and rhodium at $1,050/oz.
Bernanke’s announcement of further money printing
and ultra loose monetary policies saw gold and
silver surge in all currencies yesterday. Gold rose
$34.30 or 1.98% in New York and closed at $1,732.00. Silver soared to a high
of $34.781 and finished with a gain of 4.34%.
XAU/USD Currency – (Bloomberg)
Gold surged to a 6 month high in dollars, to very close
to new record highs in euros and importantly to an all
time record nominal high in Swiss francs (see chart below). Gold
climbed as much as 2.2% in the “safe haven” Swiss franc to 1,657
per ounce.
Platinum topped $1,700 an ounce for the first time
since March and silver and palladium also hit their highest prices in 6
months, as the Fed announced an open-ended debt buying program and promised
to keep interest rates near zero until at least mid-2015.
XAU/EUR Currency – (Bloomberg)
Commodities and oil surged alongside equities. Oil rose
to $100 a barrel in New York for the first time since May after the Fed news
while unrest in the Middle East and North Africa fanned concern that supplies
will be threatened.
Commodities are set for the longest run of weekly gains
since 2010. The Fed decision is fuelling expectations raw-material use will
rise.
The Standard & Poor’s GSCI Spot Index of 24
raw materials gained nearly 1% to 692.62, the highest level since April 4. It
is set for a 2.3% increase this week, a seventh weekly advance and the best
run since October 2010.
Bernanke took the plunge yesterday by embarking on QE3
or what would be better described as “Currency Debasement 3”.
Improving the U.S. job market and therefore economy was
the reason given for the extremely radical measures. However, the scale of
the open ended monetary commitments suggests the Fed is worried about another
Great Depression and an economic collapse.
The move was described as "stunningly bold"
by some analysts as it is "open ended" with Bernanke pledging to
print or electronically create, with no time limit, an extra $40 billion
every single month until the labour market
improves.
This is the frightening vista we have been warning of
for some time. It means that should the US economy enter a recession and or
depression, which still seems very likely, that the Fed will continue
printing money and debasing the dollar thereby leading to dollar devaluation
and inflation - potentially virulent inflation on a par with or worse than
that seen in the 1970's.
We had long said that QE3 was inevitable - the question
was when rather than if. Indeed, we had said that given Bernanke's closeness
to Wall Street we expected that QE4, QE5 etc. were likely.
The "open ended" nature of this new round of
QE as enunciated yesterday means that the Fed could if it wished or believes
it is necessary print unlimited quantities of dollars.
The consensus continues to be that Bernanke and the
Fed's actions in addressing U.S. economic ills are bold and progressive. The
same consensus holds that the ECB’s (hindered by the Bundesbank and the will of the German people) failure to
print euros 'bazooka' style is regressive, negative and risky.
The consensus is mistaken again and in time the more
prudent monetary policy stance of the Bundesbank,
while painful in the short term, will be seen as having been the monetarily
responsible course of action.
Printing money is easy with central bankers just
pressing a few buttons on a keyboard and electronically creating billions and
indeed trillions of dollars, euros and pounds today.
Mining for gold and other precious metals is far from
easy and gets harder every year.
Miners are having to go deeper
and deeper into the ground to attempt to extract the precious metal from
declining ore grades. Peak gold has been reached in South Africa and may have
been reached globally.
The poor miners in South Africa who are wielding
machetes today will testify as to just how very hard it is to mine for the
earth’s precious metals – despite the huge advancement in
technology seen in recent years.
Blood, sweat and tears are involved in extracting small
amounts of gold from the earth's crust.
Bernanke's 'QE3', which should be known as 'Currency
Debasement 3' means that the dollar, the euro, the pound and all fiat
currencies in our current fiat based monetary system will continue to fall in
value versus gold, silver and the precious metals.
On a slightly more mundane and less important note,
today European Finance Ministers are meeting in Nicosia, Cyprus.
The Fed action is manifestly bullish for inflation
hedging assets such as equities and gold and bearish for cash in all its
forms and bonds.
For breaking news and commentary on financial markets
and gold, follow us on Twitter.
Cross Currency Table – (Bloomberg)
NEWS
Gold extends rally on Fed's new stimulus
- Reuters
Gold, Silver Prices Soar After Fed Fires Off QE3
– Investors.com
Gold at best in nearly 7 months on Fed bond plan
– Market Watch
Gold, Silver Surge on Fed Plans
– Wall Street Journal
COMMENTARY
Get Ready For The Return of the Golden Age
– Market Watch
Ron Paul: "Country Should Panic Over Fed's
Decision" – Zero Hedge
Norcini - A Violent Wave Of Short Covering In Gold &
Silver – King World News
America's Hold On AAA Rating Risks Collapse Next
Year – The Telegraph
Mark
O’Byrne
Goldcore
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