The euro crisis has begun to feel like an everlasting steeplechase with high hedges and water obstacles blocking the path to economic resurgence on the Continent. Each time a hurdle has been cleared another problem emerges.
Spot market gold bullion prices rallied above $1,680 an ounce Monday morning in London, having earlier fallen to a nine-week low, while stock markets edged lower and US Treasury bonds gained, with one day to go before the US presidential election.
Let's say you owe the world €2 trillion, but you also hold the world's fourth largest hoard of physical gold. Sounds like a no-brainer, right? Use Italy's gold to pay Italy's debt. Trouble is, Rome's gold would be worth only a drop in the bucket. The gold isn't Rome's to sell either.
The spot gold price traded lower to $1,732 an ounce Friday morning in London, near one-month lows, while stock markets and the euro also fell as a two-day European summit came to a close with several issues unresolved.
Spot market prices for buying gold eased to just above $1,770 an ounce during Tuesday morning London trading, around ten dollars below where they started the week, while stocks and commodities were broadly flat.
We’re all aboard a roller-coaster ride, and it may continue for some time yet. We are living through a truly unique moment in financial history. The forces of inflationary stimulation are doing battle with the financial system’s apparent desire for debt destruction and deflation.
Spot market gold prices fell briefly below $1,690 an ounce Wednesday morning in London trading, remaining close to six-month highs, while stocks and commodities were also broadly flat, ahead of tomorrow's policy announcement from the European Central Bank.
Wholesale prices for gold bullion climbed to $1,597 an ounce during Tuesday morning's trading in London – their highest level so far this week – while stock markets also ticked higher following news that Spain should receive some financial assistance for its banks later this month.
The proposal is only at the stage where comments are invited, but it is unlikely that the banks will turn this proposal down, since it represents a secure lending opportunity and the opportunity to diversify a bank’s own assets without facing a risk-weighting penalty.
Wholesale bullion gold prices rose Thursday lunchtime in London, extending yesterday's sharp jump and cutting this week's 2.5% drop by more than two thirds even as the euro currency again slipped through $1.24 for the second day running.