Gold Rises To New Record In GBP - Close to Near Record Highs In Euros And Most Currencies On Global Debt Contagion Risk

Tyler Durden's picture

From GoldCore

Gold Rises to New Record in British Pounds - Close to Near Record Highs in Euros and Most Currencies on Global Debt Contagion Risk

Gold is being supported as default risk has increased after EU finance ministers failed to agree on a new Greek loan package. Gold priced in sterling rose to new record nominal highs this morning at £954.84/oz and the weakness of the euro has seen gold rise to touching distance (9 euros) from new record highs in euro terms at €1,088/oz.

Equities have also fallen and Greek bonds are under selling pressure again – as are Portuguese bonds. The Eurozone debt crisis is creating the real risk of global financial contagion. Interbank and commercial paper markets are increasingly nervous about the ghosts of the Lehman Brothers collapse.

Silver continues to consolidate between $33/oz and $39/oz (see commentary below).

Cross Currency Rates

The cost of borrowing euros for three months in the interbank market continued to rise today with the three month Euro Interbank Offered Rate, or Euribor, fixed at 1.510%, up from 1.502%.

Corporate borrowing costs in the U.S. as measured by U.S. swaps rose sharply from 20 to 26.99 last week - the highest so far in 2011.

Gold in Sterling – 30 Days (Tick)

Gold and silver continue to consolidate at these levels after their most recent sell off. Concerns that gold is a bubble remain high – especially amongst those uninformed about the fundamentals of the gold market (see Commentary). 

Societe Generale SA raised its third quarter gold forecast by $90 to $1,580 an ounce and silver by $3.50 to $42 an ounce.


Silver appears to have found its footing in May and June and looks like it is consolidating between $33/oz and $39/oz.

Silver in U.S. Dollars – 3 Months (Daily)

Further short term weakness may be seen and volatility should be expected but the long term fundamentals remain as sound as ever.

Silver continues to get little or no media coverage despite the recent surge in price. This is an indication of the lack of animal spirits and irrational exuberance from mainstream participants in the silver market.

Silver remains a fringe investment and silver bullion is owned by a small fraction of investors in the U.S. and by an even smaller fraction of investors and savers in Ireland, the UK and EU.

Another good indication that the worst of the selloff in silver is over is seen in the latest Commitment of Traders (COT) data.

The U.S. Commodity Futures Trading Commission data for the week ended June 14, shows that hedge-fund managers and other large speculators decreased their net-long position in New York silver futures again last week.

SILRG Index  Silver Large Specs, futures – Net long Positions

Speculative long positions or wagers that prices will rise, outnumbered short positions by 16,587 contracts on the COMEX division of the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Net-long positions fell by 412 contracts, or 2 percent, from a week earlier. This is the lowest position since the first week of February 2010.

Net long positions are now near the levels seen late August 2007, late 2008 and in 2009 – which were all good silver buying opportunities.

While silver has had a large run up those continuing to focus solely on price and not on value and the actual real world tight supply and demand situation will continue to not understand the silver market and the importance of a diversification into silver in order to protect against sovereign, currency and systemic risk.


(Wall Street Journal) --PRECIOUS METALS: Gold, Silver Slip In Asia; Greek Debt, Fed Meet In Focus

(Reuters) -- PRECIOUS-Gold gives up early gains, euro zone crisis lingers

(MarketWatch) -- Gold, silver retreat as dollar gains


(MarketWatch) -- Gold bugs confident on gold — but stocks?

(ZeroHedge) -- Trading Of Over The Counter Gold And Silver To Be Illegal Beginning July 15

 (GoldSeek) -- Will Central Banks & The IMF Sell Gold Again?

(24hGOLD) -- These 90 Analysts Believe Gold Will Go to $5,000/ozt. – or More

(24hGOLD) -- How Germany Went Back To Gold

Time to Tell the Truth About Gold
(Editors note: This article by Barry McCall shows a massive lack of misunderstanding with regard to gold’s importance in a diversified portfolio and as financial insurance. It is factually inaccurate and unbalanced.)

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GeneMarchbanks's picture

You can still buy gold? Who knew.

oh_bama's picture

try to find a weak currency and it is always record against gold

but what is the point?

SilverShortage's picture
Bob Chapman explains what 'Trading Over The Counter Gold & Silver to be Illegal starting July 15 ' really means

Bob Chapman  of the International Forecaster explains in details what the 'Trading over the counter gold and silver " becoming illegal starting from July 15 really means , he says you should not worry about it , it is not going to affect the general public of bullion gold and silver buyers this is a market for professionals the aim for this legislation is to create panic confusion among the public and scare them from longing gold and silver while shorting the dollar bob Chapman says it is psychological warfare and you should not worry about it....







Gold price will shoot to jupiter this summer

hugovanderbubble's picture

Be careful with the Put/call Ratio at highs of last years...

Zero Govt's picture

yep PM's are pretty much the best performing asset class out there for the past decade James Turk said the other day, the real "Barberous Relic" is central banking

topcallingtroll's picture

Gold seems to becoming a risk off asset. I dont think it would be that eay with a sustained contraction and positive real rates, but we may never see that combination again with today's central bankers.

magpie's picture

"barberous" as in haircut-worthy ?

sorry Zero Govt not normally nagging on typos/spelling mistakes, but too funny.

Long-John-Silver's picture

and Silver is that Hot Blond that takes you to bed after dinner and then acusses you of rape the next morning.

Al Gorerhythm's picture

Crap! I get a bit overdrawn on my line of credit and the bank is all over it like a rash. The Greeks get a lot overdrawn and the banks are falling over themselves trying to give them some more. Maybe if I change my name to AL Exandro

Badabing's picture

As the tide goes out all boats decend, I stand on an island of gold.

Internet Tough Guy's picture

Default risk has not changed; it is still 100%.

writingsonthewall's picture

Watch and learn Gold bears.

Inflation threat - Gold goes UP

Deflation threat - Gold goes UP

The ONLY thing to bring Gold down is changing margin requirements.

This isn't about 'investment' - this is all about safety.

tiger7905's picture

Sinclair and Norcini on the depressed miner's share prices.

topcallingtroll's picture

Praise be to Die Spiegel.

Without a free press socialism might have lived a bit longer.

All of you do know socialism depends on trust that tptb are expanding government and taxes to benefit the people. When that trust disappears socialism dies.

Individual liberty thrives in weak governments where people are cynical and dont trust any politician.

Bazooka's picture

On the other news, Gold and Silver are down based on USD. This is what the market follows and measures per any other currency is ancillary. BTW, GOLD and Silver have been falling with equities and on a relief rally, they too will rise for a little while with equities. 

Gold and haven my ass!

Confucious 222's picture

Forgot your dot gov again, badzooka

goldfish1's picture

New to the shill game?

I think you can do better.

topcallingtroll's picture

Gold cant survive a contracting economy with positive real interest rates. The question is does the government have the resolve and power to prevent it.

Bicycle Repairman's picture

"Gold and Silver are down based on USD"


WilliamShatner's picture

I say, gold bitchez!