Spot gold ran to a record high above $1,090 per ounce on Wednesday, latching on to a weaker dollar with continued support from the IMF's sale of gold to India's central bank.Dollar weakening, gold and oil rising. Not a good combination for US recovery efforts at all.The dollar index declined 0.34 percent as investors awaited a Fed statement later on Wednesday.
Spot gold hit a record high of $1,092.60 an ounce and was bid at $1,091.05 an ounce, compared with $1,084.50 late in New York on Tuesday.
U.S. COMEX gold futures also hit an historic $1,093.70 in electronic trade, and were later up $7.40 at $1,092.40.
Buying on the back of the IMF's announcement on Tuesday that it had sold 200 tons of gold to India's central bank pushed prices through key technical resistance levels, triggering fresh buying, traders said.
"The market realized... that there are enough central banks which are looking to buy the gold from the IMF direct and so it is not coming into the market, so the shorts had to cover," said Michael Kempinski, a senior trader at Commerzbank.
"We should see $1,100 soon," he said.
And yet what's going to stop the dollar's slide at this point?
It would help if our government and the fed stopped devaluing the dollar. But devaluing the dollar is the only way was can pay the debt Obama is collecting.
ReplyDeleteYou and I both know this table was set years before Obama ever sat down in the Oval Office.
ReplyDeleteThe table was set but it was Obama that backed up the dump truck of mashed potatoes and gravy and unloaded.
ReplyDeleteBush unloaded a pickup full to get out of the 2001 recession and the Fed still had room to cut rates.
Now rates are at zero and the only way to cut them (the Keynesian prescription, I see you read Krugman) is to devalue the dollar giving us effective rates below zero.