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Gold Better as Currency War Escalatesby Peter A. Grant
Jan 14, AM 
Gold rebounded in earlier trade, but has since slipped back into the range after the dollar bounced off a new 3-week low. Recent dollar weakness, primarily stemming from euro strength, is now being overwhelmed by renewed yen weakness. The yen set a new 2 1/2 year low against the dollar, and a new 1 1/2 year low against the euro today. The yen has been weighed in recent weeks by Japanese monetary and fiscal policy decisions aimed at debasing the yen.With the EU already back in recession, it will be interesting see what level of euro appreciation will be tolerated before there is some sort of policy retaliation. A higher euro negatively impacts European exporters — perhaps most notably German exporters — making economic recovery increasingly more difficult with every uptick in the single currency. Over the weekend, the much discussed trillion dollar platinum coin gimmick to overt the debt ceiling debate was officially quashed by both Treasury and the Fed. I didn't expend much time on this silly idea because...well, it was silly. However, that still means a potentially contentious battle over the debt ceiling is in the offing. Treasury may be able to forestall with some not so overt gimmickry into March, but some are suggesting that the government will run out of money sometime in February. Be assured, the debt ceiling will get raised. What remains to be seen is if there are some spending concessions and/or long-term entitlement reform extracted in the process. Whatever that outcome, sometime before the end of Q1 we will commence the inevitable march toward the next debt ceiling. 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.
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Monday January 14
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