The U.S. national debt continues to surge higher every day and is now at $16.95 trillion and will soon surpass the $17 trillion mark. But that's just the official number. The real number may be much higher.
On the surface, gold is not often seen as a convenient financial instrument. It is old fashioned, requires a place for storage and is not easily obtainable for the average American at current prices. However, the precious metal continues to evolve as the worldwide financial crisis motivates individuals to seek protection.
For commodity markets, a fiscal cliff deal portends an uptick in cycle-sensitive crude oil and copper prices. Gold and silver may likewise find near-term support amid ebbing haven demand for the US dollar.
Gold inched lower on Wednesday despite Greece's lenders being unable to agree on a debt deal, but support for bullion remains due to the very uncertain economic backdrop and global central bank’s loose monetary policy stance.
Commodities are on the upswing in overnight trade amid a broad-based recovery in risk appetite. The MSCI Asia Pacific regional benchmark index is up over 1%, pulling sentiment-anchored crude oil and copper higher.
Gold prices hovered just below $1,738 an ounce Monday morning in London, close to three-week highs, while stocks and commodities were broadly flat and the euro traded near two-month lows against the dollar.
This is quite a statement coming from a “mainstream” investment firm. Wall Street's usual reaction to gold is that it is a barbarous relic whose only use is in jewelry and that no sane investor should put any money into it or even paper gold instruments.
Thank Bill Gross for adding muscle this week to the already strong gold prices. The Pacific Investment Management Co. founder and co-chief investment officer said US fiscal problems will burn investors if they aren't protected by gold and real assets.
Do recent stirrings in precious metal prices indicate an end to complacency, or is it just a speculative bounce? Time will tell, but given the rapid deterioration of government finances, gold and silver have been left a long way behind.
As the price of gold has gone up fivefold over the past 10 years, why would one buy it at today’s prices? For the same reason an investor would buy any other asset: if one believed it would be a good investment now.