|
 |
|
|
|
Gold Retreats, but Long-Term Trend Remains Soundby Peter A. Grant
Jan 11, AM 
Gold has retreated, retracing yesterday's solid gains, as choppy trading within well established range persists. The yellow metal is being weighed by a modest bid in the dollar and long liquidations after gold failed to build on yesterday's gains, leaving last week's high 1694.92 and the midpoint of the year-long range at 1721.61 well protected. Action remains further confined by last week's range.Gold did succeed in setting a new all-time high against the yen this week at ¥149,551.96 as monetary and fiscal policy in Japan suddenly seems to be overshadowing the accommodative stances of the Fed, ECB and BoE. Today Japanese PM Shinzo Abe unveiled a ¥10.3 trillion fiscal stimulus package, while continuing to pressure the BoJ to cut loose with “a bold monetary policy” to further stimulate the economy and drive real price inflation to Abe's target of 2%. During a question and answer session after a speech on Thursday, St. Louis Fed President James Bullard said he's a "little disturbed" by Japan's exchange rate policy. Well sure, the Fed has expended trillions of dollars in recent years to keep rates pegged near zero; the perhaps not so subtle intent being to drive down the value of the dollar. It is understandably disturbing when a major trading partner steals the show and is more effective at debasing the yen than the Fed has been at undermining the dollar. In fact, the yen plunged to new multi-year lows against all of the major currencies this week. The findings of the Official Monetary and Financial Institutions Forum (OMFIF), where published by the World Gold Council today. The OMFIF is think tank made up of "a wide-ranging group of central banks, sovereign funds and other public sector asset managers, supervisory and regulatory bodies, financial policy-makers, public sector debt agencies." The report entitled Gold, the renminbi and the multi-currency reserve system warns of a "coming dollar shock" and advocates for the re-monetization of gold as part of a multi-currency reserve system. The OMFIF deems gold worth for inclusion in any such new regime because it has historically fostered confidence and stability in monetary systems. The report goes on to say: "If the spectre of collapse continues to haunt the main reserve assets, and on the expectation that the renminbi will take time to get into its stride, the world will rush to safe havens. Gold may be the only one with the requisite size, clout and – dare I say it – history to help ward off the strains that will beset the world monetary system. It would be wise to draw up contingency plans for such eventualities." The use of gold to fill the vacuum as the reserve system goes through its changes would understandably increase demand for the precious metal, perpetuating the the long-term secular bull market. Gold has recorded twelve consecutive annual gains. A survey conducted by the LBMA suggests that gold may advance another 14% this year. NEWSLETTER SIGN-UP Opinions expressed in commentary on the USAGOLD.com website do not constitute an offer to buy or sell, or the solicitation of an offer to buy or sell any precious metals product, nor should they be viewed in any way as investment advice or advice to buy, sell or hold. USAGOLD, Inc. recommends the purchase of physical precious metals for asset preservation purposes, not speculation. Utilization of these opinions for speculative purposes is neither suggested nor advised. Commentary is strictly for educational purposes, and as such USAGOLD does not warrant or guarantee the accuracy, timeliness or completeness of the information found here.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Saturday January 12
website support: sitemaster@usagold.com
Site Map - Privacy - Disclaimer
The USAGOLD logo and stylized gold coin pile are trademarks of
Michael J. Kosares.
© 1997-2012 Michael J. Kosares / USAGOLD All Rights Reserved
(from USAGOLD.com) --
