GOLD CONQUERS DEVALUED CURRENCIES
The recent drop in the Gold price on positive U.S. economic data has created a buying opportunity for some investors, while others have turned to riskier assets. What the market does not know is that, abroad, Gold is currently at an all time high, as many countries are flocking to Gold in place of their devaluing currencies. Japan, Brazil, Iceland and India are a few of the nations where citizens have begun purchasing the yellow metal to hedge against inflation. Japan, the world’s fourth largest economy, began the year with a new government that, for the first time ever, initiated monetary easing. Last July, an ounce of Gold sold for 125,000 yen and today sells for 145,000 yen. Overall, Gold has soared by 36 percent in yen in the past two years. In that same time period, the price of an ounce of Gold in Argentina has increased by 45 percent, hitting record highs. The day to day prices for Gold has had the market’s focus recently, but why are we not paying attention to who is buying Gold? Why are they purchasing, and what do they know that we don’t?
First-time jobless claims fell by 7,000 to 340,000 for the week ending March 2. The Labor Department reported the drop drove the monthly average to a five-year low. The Bloomberg Consumer Comfort Index showed improvement for the fifth consecutive week as Americans continue to have a positive economic outlook. “Businesses have, at least so far, shrugged off the effect of the tax increases and the spending cuts and they’re hiring,” Mark Zandi, chief economist at Moody’s Analytics Inc. and the top jobless claims forecaster, according to data compiled by Bloomberg, said. “Job growth is actually improved. That’s on top of record high stock prices, surging housing values and even, in the last couple weeks, gas prices that have started to decline.”
At 5:15 p.m. (EST), the APMEX precious metals spot prices were:
- Gold, $1,579.60, Up $2.70.
- Silver, $28.91, Up $0.06.
- Platinum, $1,596.20, Up $14.40.
- Palladium, $757.10, Up $10.10.
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