Tag: dollar

US Dollar Looks Strong

US Dollar Looks Strong

The rally in the US Dollar continues not out of any particular set of strong fundamentals in the US but rather out of a general aversion to the Euro and by consequence, to the European currencies. While the Fed seems to be basically standing pat for the immediate moment, the Bank of England has announced another round of its bond buying program while the ECB has lowered rates. Given that backdrop and the lingering fears and uncertainty over the bailout mechanism put in place by the European finance ministers and political leaders, traders continue to bid up the Dollar. This buying is a reflection of the unease among traders over current […]

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German debt problems

German debt problems

Somewhat counterintuitive action in the precious metals markets yesterday, with gold and silver coming under selling pressure despite news of easing from a trio of major central banks. As expected, the Bank of England announced a further £50 billion of quantitative easing yesterday (the UK’s own “QE3”), which will bring the BoE’s total QE since 2008 to £375bn. Elsewhere, the European Central Bank and the People’s Bank of China cut interest rates. The ECB cut its short-term lending rate to a record low of 0.75% – down from 1.0% – while the PBC announced a 0.31 percentage-point cut in its one-year yuan-lending rate, to 6% (which seems like a crazily […]

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Currencies Don’t Make Gold Look Good

Currencies Don’t Make Gold Look Good

Let’’s start by stating that the title of this essay refers to the current situation on the gold market – not to the long-term fundamental picture. In fact, up to this day, no paper currency has survived in its original form while gold has been used as money since time immemorial. Every fiat currency since Roman times has ended in devaluation and eventual collapse, of not only the currency, but often of the host economy. The usual course of events is that paper currencies are inflated away until worthless. The purchasing power of the US dollar, for example, has declined by 90% since 1950, also true for most currencies. The […]

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Hedge Funds Continue to Pummel Silver – Until Today

Hedge Funds Continue to Pummel Silver – Until Today

If you want to talk about how utterly insane our markets have become and how schizophrenic the trading action has mutated into, look no further than the last two days of trading this very week. On Thursday, silver was mauled by hedge fund selling tied to both long liquidation and brand new fresh short selling. The result? Silver hit a 52 week low! One day later – it rockets to close 5% higher in a single day. This is the type of madness that has been unleashed by Central Bank interference into the market place which is the SOLE CAUSE of this volatility. I could give example after example of […]

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This currency war is like a giant game of money chess

| June 26, 2012 | Articles: Insights
This currency war is like a giant game of money chess

Regardless of how bad things get this week, just be thankful you’re not the Greek finance minister, writes Dan Denning for the Daily Reckoning Australia. Vassilios Rapanos resigned his post four days after being appointed. He’d been in the hospital after collapsing on Friday, probably after getting his first look at the real state of Greek finances. Greece will be one of the items on the agenda at this week’s European Union summit. The coalition led by new Greek prime minister Antonis Samaras pledged to renegotiate the terms of the previous bailout deal between Greece and the EU. That was the $163 billion deal. As if that wasn’t enough uncertainty for the […]

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Weak Euro Keeping a Lid on Gold Bullion Ahead of EU Summit

Weak Euro Keeping a Lid on Gold Bullion Ahead of EU Summit

Gold Bullion prices dipped below $1570 per ounce during Monday morning’s London trading, though they remain broadly in line with last week’s close, with markets focused on this week’s European leaders summit. Gold Bullion is now at levels similar to those seen in the second week in May, when gold fell through $1600 for the first time in 2012. “Gold has essentially been in a sideways range for the past seven weeks,” says the latest technical analysis note from bullion bank Scotia Mocatta. “We will need to see a break through the low at $1526 to get a bigger directional move.” Silver Bullion hovered around $26.80 an ounce – a slight dip on where […]

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Is Gold About to Rally? USD Index and Crude Oil Prices Suggest Otherwise

Is Gold About to Rally? USD Index and Crude Oil Prices Suggest Otherwise

Congratulations. Let’s all take a collective deep sigh of relief. Instead of a new crisis, we’re just going to keep having the same old one. Greeks voted to stay in the European Union with a narrow victory for the center-right New Democracy party. A global crisis has been averted—for now. But as we take a deep sigh of relief let’s keep in mind that the euro is already on a slippery slope to oblivion. Let’s face it. A Greek exit is already a forgone conclusion for many. Now it’s Spain’s turn to headline with its bond yields soaring to new euro-era highs. Spain’s economy is almost twice the combined size […]

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Weak Euro Weighing on Gold Price while Eurozone Growth Plan Based on Funny Money

Weak Euro Weighing on Gold Price while Eurozone Growth Plan Based on Funny Money

The Gold Price hovered around $1620 per ounce for most of Monday morning’s London trading – slightly below where it ended last week – while stocks and commodities were also broadly flat, after initial rallies that followed yesterday’s Greek election result quickly petered out. The Silver Price drifted lower to $28.41 per ounce by Monday lunchtime in London – a 1% drop on Friday’s close – while US, UK and German government bond prices all saw gains ahead of the week’s Federal Reserve policy meeting. The Euro meantime briefly broke above $1.27 for the first time in nearly a month, before dropping by more than one cent by lunchtime. “There is a downward bias […]

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How to Save Your Money And Your Life

By Doug Casey, Casey Research I think there are really only two good reasons for having a significant amount of money: To maintain a high standard of living and to ensure your personal freedom. There are other, lesser reasons, of course, including: to prove you can do it, to compensate for failings in other things, to impress others, to leave a legacy, to help perpetuate your genes, or maybe because you just can’t think of something better to do with your time. But I’ll put aside those lesser motives, which I tend to view as psychological foibles. Basically, money gives you the freedom to do what you’d like – and […]

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Silver correction putting miners under pressure

Silver correction putting miners under pressure

After weeks of sailing on troubled waters, the silver market is giving mixed signals. Analysts are struggling to discern whether or not the metal will be able to consolidate above resistance at $28.50, or whether silver is still in danger of further sell-offs. Much will depend on developments in the US dollar market and the global economy – a view shared by Randy Smallwood, president and CEO at Silver Wheaton, a Vancouver-based silver-streaming company. The euro crisis has been a big depressing influence on commodity markets in recent months. With the continent’s debt crisis getting worse by the day, many investors are being drawn to the dollar. Most are confident […]

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Dollar Still Makes a Negative Impact on Gold

Dollar Still Makes a Negative Impact on Gold

Remember the disaster movie, “The Day After Tomorrow,” in which melting polar ice causes disruption to the north Atlantic currents precipitating a new Ice Age? The main character, a paleoclimatologist played by actor Dennis Quaid, warns government officials of the approaching disaster, but no one heeds his warnings. One of the fears of global warming is a disruption to the nature of ocean currents that could bring profound and possibly destructive changes to our weather patterns. In economics there are also great currents that have natural patterns and it looks like they are undergoing profound changes. Weather patterns can take centuries or even eons to evolve, but in economics, things […]

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Gold And Crude Oil Charts: Does Any Clear Picture Emerge

Gold And Crude Oil Charts: Does Any Clear Picture Emerge

We have all seen the newspapers headlines about the troubles in Greece, Spain, Portugal, Ireland and the entire eurozone. The situation in the U.S. is not much better, even if the press is ignoring it for the moment. In both blocks there is high debt and large, long-term entitlement programs for citizens without any clear notion of where the money to fund these programs will come from. (Hint—the printing press.) The global economic situation is unstable and untenable. How long can citizens in the West continue to buy more and more imported manufactured goods from the East? When the West’s appetite for unessential consumer goods will lessen as people learn […]

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Strong-Dollar Fallacy

Strong-Dollar Fallacy

After a shocking upset in Greece’s parliamentary elections, the US dollar surged dramatically. Soaring 5.4% in May alone, the world’s reserve currency won legions of fans among traders. “King Dollar” was universally lauded, with everyone jumping on the strong-dollar bandwagon. But this dazzling strength was merely a short-term phenomenon. Zoom out a little, and today’s “strong dollar” is a fallacy. Perspective is everything in the markets. Attaining it is challenging and takes a lot of effort, but the fruits are well worth the toil. We humans naturally tend to extrapolate the present and very recent past out into infinity, expecting short-term situations to continue indefinitely. So when prices surge rapidly […]

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Gold Reverses Higher on Friday 6 June

Gold Reverses Higher on Friday 6 June

Gold moved higher Friday as the Euro cut its losses and as sources learned that Spain will soon request assistance for its ailing banks. However, for the week Gold declined because investors currently don’t see monetary easing from the Federal Reserve or European Central Bank. This week the ECB did not cut rates nor implement any new crisis fighting measures. Furthermore, yesterday Fed Chairman Ben Bernanke said it was too soon for another round of easing. We will hear more after the Fed meeting on June 19-20. It should be noted that Gold gained along with the US Dollar. The negative correlation between the two is the weakest it has […]

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