Gold keeps its head while all about are losing theirs. Gold price closed at $1,855 per troy ounce at Comex. This time last year it was at $1,255. Silver, too, shows its strength, closing at $42.24 per ounce. Up from $19.98 a year ago.
Not all markets are holding up as well as gold and silver, though. In Europe, the New York Times reports that “the sovereign debt crisis in the euro zone could intensify again.” The reasons why: Germany’s export industry is greatly slowing down; Greece is reportedly not making the fiscal “haircuts” it agreed to in return for their not one but two multi-billion euro bailouts; and last, European banks are showing real signs of weakness---read: insolvency---because their balance sheets are inundated with over $2 trillion dollars worth of government bonds from debtor nations like Portugal, Spain, and Italy. In short, it doesn’t look pretty.
It does not look pretty in the US, either. Over 400,000 new people sought first-time unemployment compensation from the United States federal government. While consumer credit fell over $3 billion dollars in the summer months. In line with falling numbers, the Dow Jones closed down 119 points at 11,296.
Lost jobs and a falling DIJA, however, are just the beginning. The more interesting news comes out of some recently disclosed US Embassy cables which reportedly detail how the Chinese government holds the view that Western central banks are trying to suppress the price of gold by manipulating the gold future markets. As a result, China has implemented its own program of discreet gold accumulation.
Accumulating is exactly what they have done. According to the People’s Bank of China, in 2003 the bank held only 600 tons of gold reserves. Now they hold over 1054 tons. According to the cable, they are looking to buy even more gold.