Geopolitical Risk Is Positive for Gold

Gold: Gold is trading at $933.50 and remains subdued overall. Near term resistance and support are currently $944 and $913 respectively. Direction may be poised to come from EUR/USD moves and the EUR/USD is maintaining equilibrium despite a positive world economic outlook from the OECD.

This positive news is paired against continuing geo-political risk and negative USD comments overnight from a senior Chinese official.

The Head of the Economics Department of the ruling Communist Party research office said that:

The US is printing dollars on a massive scale, and in view of that trend, according to the laws of economics, there is no doubt that the dollar will fall. So gold should be a better choice.

Reuters reported his comments:

If the yuan should go international or become a reserve currency, China needs more gold to back that.

These comments are bullish of gold's medium term prospects.

Meanwhile in Europe, in a move to resuscitate the credit markets the ECB pumped a record €442.2bln into the Eurozone banking system in its first ever offer of unlimited one-year funds. This is also positive for gold in the medium term.

Silver: Silver is currently trading at $13.88 and resistance and support remain at $14.13 and $13.63.

PGMs: Platinum trading at $1,173, Palladium at $ 234.00 and Rhodium at $1,225.00.

Disclosure: No positions

Comments

[jschulmansr:]

Of course China needs to buy more Gold. The United States ought to be doing the same instead of manipulating Gold Prices. We need to audit our Gold Reserves in addtition to the FED.

Jun 25 11:39 AM

[one eye:]

Our Congress gave approval to the IMF to go ahead with Gold sales, and to Inject about $100 Billion into their Coffers.

China Needs Gold? We are going to sell them Gold. They will buy our Junk Bonds, seems like a fair trade.

Jun 25 12:07 PM

[Larry House:]

Gold and silver have headwinds that just about match the tailwinds. Hard to tell what will get them moving and when and in which direction.

Jun 25 02:31 PM

[George Enone:]

What is the name of this Chinese economist? Anybody know..?
Remember when current British PM Gordon Brown as British "Fed Chairman" sold all of Britain's gold between $200-250 in 2001-2002 saying its worth nothing...only to see gold prices spike to near $1000 today...Why would the Chinese buy an asset at the top when its next direction is flat to down to crash? The Red Dragon is not that dumb! A better long investment for the Chinese is US land and real estate and base metal companies (Alcoa/US Steel/Nucor) with direction flat to up to spike as the US economy and USD recovers in the next 3-10 years... but a political sensitive issue for America to be sold to a foreign government.

Jun 25 03:19 PM

[George Enone:]

The total world amount of mined gold amounts to a paltry 6% of global wealth. IMF is now selling their gold...smart guys trying to cash in before the crash like in 1980, then buy it back at $200/ounce and hold it till the next crisis. This is how the IMF makes money if you didn't know. The Chinese only have 2% of their reserves in gold FOR A REASON, Japan NOTHING.


On Jun 25 11:39 AM jschulmansr wrote:

> Of course China needs to buy more Gold. The United States ought to
> be doing the same instead of manipulating Gold Prices. We need to
> audit our Gold Reserves in addtition to the FED.

Jun 25 03:34 PM

[HA65MPH:]

GEORGE, in case you did not know , the Chinese are a lot smarter than you give them credit for , of course they will -have bought the imf gold , ..first in line. timmy'' and obamma are leading our wonderful to hell , ...i see china as the top country in the making ,...take your blinders off .

Jun 26 10:13 AM

[sorgmot:]

Remember the 1972 to 1980 years with Nixon and Carter and inflation and stagflation. The USA now has the rerun ot that old movie in the Bush and Obama years form 2000 to 2012 or 2016.

Reagan ended the Nixon-Carter inflation and US$ bond interest rate take off to 18% as Reagan began in office in 1980.

Now in 2009 US$ bond interest rates are soaring again and inflation in staples (food fuel and commodities) is too.. USA real estate prices in US$ falls as interest rates on US$ rise as the US$ falls against foreign currencies.

Yes, Reagan did it right with the help of Uncle Milton and Walter the giant at US Treasury..

The bomb is a short timer doing a lot of damage like Carter did.
Relax, the force is with you.

Good Luck.

Jun 26 03:03 PM

[Mike10613:]

The US should buy gold with the money it's printing. Paper for GOLD! That has to be a good deal!

Jun 26 04:38 PM

[one eye:]

Bond Interest Rates are Soaring again. What a Crock. Relative to what? 18% back in 1982?

Back to what they were in 2007? Its just Unbelievable, look at them Charge upwards. It Must be A Bubble!

Jun 28 05:58 PM