Paul Joseph Watson
Friday, April 30, 2010
Gold bullion reached a 2010 high today following concerns over euro zone sovereign debt levels after Greece, Spain and Portugal were hit with disastrous credit rating downgrades, with analysts now predicting that prices are set to move back towards their December high when gold peaked at $1,226.10 an ounce.
“Gold hit a 2010 high above $1,170 an ounce in Europe on Friday, fueled by euro strength and investors continuing to embrace the metal’s safe-haven properties on unease over euro zone sovereign debt levels,” reports Reuters.
“Gold has been trading in a range of $1,160-1,175, and if $1,175 gets taken out, we should be in for a sharp rally,” Afshin Nabavi, head of trading at MKS Finance in Geneva told CNBC. “We could head for the $1,200 area.”
- A d v e r t i s e m e n t
The SPDR Gold Trust has also noticed a strong increase in safe haven demand for gold, attributing the rise in the precious metal to U.S. investor concerns about the implications of the European debt situation.
Almost two months ago, we predicted that gold was set to keep on rising against depreciated currencies.
At the start of this week, gold bullion hit new nominal highs against both the Euro and the Swiss Franc as the fallout from the Greece debt crisis continues to undermine trust in currencies.
Gold’s traditional inverse relationship with the U.S. dollar has also temporarily decoupled, with the greenback largely trading sideways with slight gains against other currencies, a pattern being mirrored by gold. This is precisely what we saw during gold’s biggest rally ever between 1978 and 1980, which as Jonathan Ratner notes in his article today for the Financial Post, “Was being driven by fears of a collapsing global monetary system, and investors fled all paper currencies.”
As long as governments continue to struggle with spiraling debts and are forced to crank up the printing presses, gold will continue to outperform currencies, a situation which is unlikely to change any time soon.
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