Ahead of G20
In the next G20 meeting in Seoul starting on 11th November the leading nations will try to find a solution to the global currency policy.
Presently most nations are devaluing their currencies to keep up with the falling Dollar.
This has pushed the price of gold to new records after the FED's new QE round last Wednesday.
Usually G20 meeting are no more than a promise to do something but no real steps are taken.
This seems to be the story again as even before the meeting China and The U.
S are arguing who's responsible for the currency issues.
The U.
S has continually demanded that China lets its currency appreciate against the Dollar and China on the other hand is blaming the U.
S for devaluing the Dollar.
All political uncertainty is gold positive and a very interesting statement was made by the World Bank president Robert Zoellick.
He said that a new monetary system should be created where currencies would be backup by gold and silver.
This would take us back to the 1970s when the U.
S Dollar was tied to gold and all other currencies to the Dollar.
If this happens, investing in gold would have been the best decision in one's life.
Gold would officially be in the monetary system again and the demand would increase dramatically.
Whether or not this happens in the future, is just speculations but it definitely puts gold on the spot again.
An official body making a comment like this increases the general awareness of gold bullion investments more than any jump in the price.
The Sovereign debt worries have return to the Euro zone as Ireland and Portugal are struggling to get their economies back on track.
This has pushed gold up in Euros as the currency has been sliding.
Last June when gold made its last price records, it was specially the sovereign debt fears that pushed the price up.
Ireland, the most in debt Euro nation, has tried to convince EU that it can clear its debts by cutting public spending but this might not be enough.
After bailing out Greece, Germany clearly stated that it will not save any other nations if they have problems with their national economy.
After few weeks of consolidation, the price of gold has been climbing up as investors have realised that no fundamental improvements have taken place in the monetary system and investing in gold is the best method to protect one's wealth.
Retail demand in India is picking up again after few months of silence as the retailers have accepted the current price levels.
This is very positive news for gold as the Indian retail demand is around 20% of the annual production.
As long as the retailers are ready to buy gold at these price levels, a major drop in price is unlikely since every time the price dips retailers are likely to buy more and push the price back up.
Recent news has shown that the global economy has not solved any of the issues which drove us to the recession a few years ago and printing more money will not be a long term solutions.
As I have mention several times before, these problems need to be solved in a responsible manner and only then the recovery can begin.
Presently most nations are devaluing their currencies to keep up with the falling Dollar.
This has pushed the price of gold to new records after the FED's new QE round last Wednesday.
Usually G20 meeting are no more than a promise to do something but no real steps are taken.
This seems to be the story again as even before the meeting China and The U.
S are arguing who's responsible for the currency issues.
The U.
S has continually demanded that China lets its currency appreciate against the Dollar and China on the other hand is blaming the U.
S for devaluing the Dollar.
All political uncertainty is gold positive and a very interesting statement was made by the World Bank president Robert Zoellick.
He said that a new monetary system should be created where currencies would be backup by gold and silver.
This would take us back to the 1970s when the U.
S Dollar was tied to gold and all other currencies to the Dollar.
If this happens, investing in gold would have been the best decision in one's life.
Gold would officially be in the monetary system again and the demand would increase dramatically.
Whether or not this happens in the future, is just speculations but it definitely puts gold on the spot again.
An official body making a comment like this increases the general awareness of gold bullion investments more than any jump in the price.
The Sovereign debt worries have return to the Euro zone as Ireland and Portugal are struggling to get their economies back on track.
This has pushed gold up in Euros as the currency has been sliding.
Last June when gold made its last price records, it was specially the sovereign debt fears that pushed the price up.
Ireland, the most in debt Euro nation, has tried to convince EU that it can clear its debts by cutting public spending but this might not be enough.
After bailing out Greece, Germany clearly stated that it will not save any other nations if they have problems with their national economy.
After few weeks of consolidation, the price of gold has been climbing up as investors have realised that no fundamental improvements have taken place in the monetary system and investing in gold is the best method to protect one's wealth.
Retail demand in India is picking up again after few months of silence as the retailers have accepted the current price levels.
This is very positive news for gold as the Indian retail demand is around 20% of the annual production.
As long as the retailers are ready to buy gold at these price levels, a major drop in price is unlikely since every time the price dips retailers are likely to buy more and push the price back up.
Recent news has shown that the global economy has not solved any of the issues which drove us to the recession a few years ago and printing more money will not be a long term solutions.
As I have mention several times before, these problems need to be solved in a responsible manner and only then the recovery can begin.
Source...