Gold Targets $1600 Per Ounce - New Nominal Record, Silver Surges 9% in 24 Hours as Dollars Falls

Tyler Durden's picture

From Gold Core

Gold Targets $1600 Per Ounce - New Nominal Record, Silver Surges 9% in 24 Hours as Dollars Falls

Gold has risen to new record nominal highs at $1,594.45 per ounce and silver has surged another 3% to over $39 per ounce after yesterday’s 6% rise. Today’s London AM Fix gold fix was $1,592.50 £987.54 and €1,119.04 – all of which are new record nominal highs.

European stock markets are lower after Asian equity markets were mixed overnight with the Nikkei falling 0.27%.

European debt markets are under pressure this morning with Spanish and Italian bond yields rising towards 6% again.

Ireland’s 10 year and 2 year yields spiked to new record highs at 14.13% and 20.9% prior to sharp falls which had the hallmarks of sovereign intervention - possibly the ECB or China.

The U.S. had its Aaa bond rating placed on review for possible downgrade by Moody’s which cited the “rising possibility” that the debt limit won’t be raised on a timely basis.

U.S. treasuries have also been sold this morning. Concerns that QE3 and the printing and electronic creation of hundreds of billions of dollars and Obama’s walkout from debt ceiling negotiations is not helping dollar and bond market jitters and has led to the record dollar gold price.

Ron Paul and Ben Bernanke: Is Gold Money?

Gold’s new record highsmay also have been contributed to by the debate between Federal Reserve Chairman, Ben Bernanke and Presidential candidate Ron Paul at the U.S. House Banking Committee (see video here).

Dr. Paul asked about the collapse in the value of the dollar by almost 50% in the past three years to less than a 1,580th of an ounce of gold.

“When you wake up in the morning, do you care about the price of gold?” he asked Mr. Bernanke.
“Well,” Bernanke replied. “I pay attention to the price of gold. But I think it reflects a lot of things. It reflects global uncertainties. I think the reason people hold gold is as protection against of what we call tail risks, really, really bad outcomes. And to the extent that the last few years have made people more worried about the potential of a major crisis then they have gold as a protection.”
Paul: "Do you think gold is money?"
Bernanke: "No. It's a precious metal."
Paul: "Even if it's been money for 6,000 years? Somebody reversed that and eliminated that economic law?"
Bernanke: "Well, you know, it's an asset. Would you say treasury bills are money? I don't think they're money either, but they're a financial asset."
Paul: "Why do central banks hold it if it's not money?"
Bernanke: "Well, it's a form of reserves."
Paul: "Why don't they hold diamonds?"
Bernanke: "Well, it's tradition. Long-term tradition."
Paul: "Some people still think it's money."

The Federal Reserve Chairman’s admission that gold is “protection” against “tail risks” and “really, really bad outcomes” is important and marks another step towards gold’s movement from being a fringe asset to being a core part of a properly diversified portfolio.

Gold is increasingly being seen as an important safe haven asset and indeed currency (despite Bernanke’s feeble denial of this) and this interview may be seen as another landmark in gold’s move from fringe “barbaric relic” to mainstream investment and savings vehicle.

(The Telegraph) -- Gold price hits all-time high on European debt crisis and US QE

(The Independent) – Gold price hits record high as eurozone woes spread across Atlantic

(Reuters) – Gold hits record, extends gains to 9th day

(Bloomberg) -- Gold Climbs to Record on Concern About Fed Stimulus, Europe’s Debt Crisis

(The Street) – Ron Paul Attacks Bernanke on Gold


(You Tube) – Ron Paul vs Bernanke: Is Gold Money? - July 13, 2011

(MarketWatch) – A great day for gold — and the bugs (mostly) think more are to come.

(ZeroHedge) – Moody's Puts US AAA Rating On Downgrade Review

(The Telegraph) -- The countries with the largest gold reserves

(The Telegraph) – How to invest in gold

(The Telegraph) – Italy money supply plunge flashes red warning signals

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thunderchief's picture

Silver will move back to its 15:1 ratio to gold.  That will put it over $100 an ounce.  You should buy as much physical silver as you can get your hands on at these bargain prices. 

Captain Benny's picture

Whats making me think there is more room to run is how the GDXJ is trading.  Also take a look at GDX.  Not at new highs yet.  Still undervalued.  So I'm still acquiring miners along with my metal.

bankrupt JPM buy silver's picture

Everytime TD posts these types of articles, Silver gets beaten.  Its almost as though Blythe gets pissed reading it, and fires off 20K sell blocks for shits and gigs

slaughterer's picture

Yes, PMs have been sliding ever since this article was posted.  BB will play down QE3 remarks in today's session.  Recent silver longs are holding onto over 5% profit.  I would expect some technical selling today.    

theMAXILOPEZpsycho's picture

Yes they have! And I must now look like some kind of sleuth! "keeping your powder dry" they told me! "get back in at $70 they told me!"

If anyone wants to pay be $300 dollars a year for investment advice please PM me your bank details

oddjob's picture

You panicked and sold your Wildcat, but when others sold Tinka you called them bad names.

eigenvalue's picture

But do you have enough safe place for your physical silver?

OldTrooper's picture

I've concealed my stack of silver under a pile of 5.56, 7.62, .45 ACP and 12 gauge ammo.

Sudden Debt's picture

I think silver will be at 400$ in the next 3 to 4 years but short term, they'll push it back down to 33$ before QE3 is anounced.

I'm waiting to buy another 200 ounces by the end of the year, a bit cheaper :) At least I hope so.


bigwavedave's picture

your nuts. the gold price i see increasing. and silver along with all other physical. but $400 is insane. the new peru mines are just mother-fucker lodes dude.

theMAXILOPEZpsycho's picture

Nope he's not nuts - the public will start waking up in the next couple of years, demnding their pensions etc have some precious metals in them, banks will be buying, chinese, even the poor ones will be stacking. The upside potential once silver is let loose is ungodly

IAmNotMark's picture

I carry three silver coins that I bought at less then $5/ounce. I was talking to my dad back then about silver. I told him that I was expecting $50 silver in the next several years. He said: "Your nuts. $50 silver is insane."

Sudden Debt's picture

the new Peru mines?


Most of the Peru mines are down 20% in productivity in the last 3 years.

There are no big mines who openend over there.

You're just bullshitting.

au_bayitch's picture

@SD , Some BTFD, some try and time the market, others just purchase each payday. But purchasing sooner than later may be the best idea. India and China influences in Dec and Jan on gold may drive the silver price higher.

goldencross10's picture

Been long gold, now long silver as long as US defalut talks are still in play. If anyone holds silver coins, hang onto them, 1 quarter is like almost $6 worth of silver

Dr. Richard Head's picture

Funny thing is that the silver quarter still buys the same amount of goods now that it did in 1913, of course nominal value over silver content value need to be taken into consideration. Paper bugs confuse me.

OldTrooper's picture

I'll take 10 rolls at that $6/quarter price.  That comes out to only $33.20 an ounce.

DosZap's picture

It's geat to be long, and been long, but are you long on in your hands metals?.

If not, your screwed.

goldencross10's picture

Yes I have several rolls of silver coins that I got a long time ago in a random batch for nowhere close to what it is worth now, I'd say pretty good investment

Kreditanstalt's picture

"The Federal Reserve Chairman’s admission that gold is “protection” against “tail risks” and “really, really bad outcomes” is important..."

Well, not really.  That's only the modern mainstream view.  Gold is money, period.  It has been money even in times of calm.

tarsubil's picture

Gold is not only money and has been money for thousands of years. It is the best money. What happens if credit crashes and there is too little fiat? You'll want good money. What if the credit crash or debt mountain is replaced with a tsunami of printed fiat and there is too much fiat? You'll want good money. Gold is the best money, silver ain't bad either.

Tejano's picture

He's lying or ignorant or both when he says people hold gold as 'protection against tail risks' - small chance of happening.

Wrong! We hold gold as protection against a sure thing - fiat collapse.

eigenvalue's picture

Is the strength of PMs simply because people are preparing for the debt ceiling showdown this month?If the ceiling is raised, the Fed will have no choice but to launch QE3 as early as August to monetise the new debt. If the ceiling is not raised, the US will presumably default on its debt. Both scenarios are bullish for PMs. And perhaps that's why the Euro is so strong in the face of the PIIGS issue.

web bot's picture

I think you're right. It's win win.

Most of the bubble speculation was shaken out of the market with the changes in margin requirements... meaning that we are now seeing a legitimate rise based on fundamental worries as opposed to a speculative bubble.


entendance's picture

<...The system is dying and society is coming apart.
The only rational thing to do is to prepare for what is coming.>

theMAXILOPEZpsycho's picture

feeling jittery at these prices - this reminds me of only a little while ago. Bernank talks PMs rise, silver approaches JPMs stock price, looks like the dollar is the worst thing ever...has to be another take down before QE3 comes, just has to be...

Stack a little physical if you want, but I'm not blowing my powder yet - I still think we might get an absolute gift of a price later in the that I mean $29-31

Just Observing's picture

And if you're wrong, you'll be chasing 50-70......watching the train disappear without you.

fallout11's picture

Hate to say that, but I already feel that way. I bought silver back at $13, and now kick myself for not buying more then.

At ~$40+, there are better' physical' bargains to be had that will hold value just as well.  Ammunition, for example, which is about the same price today that it was when silver was ~$20.  Food and ag commodities are up since then, but not that much.  In short, I agree that we are likely to see silver rise further, but for your $ bonar there are now better plays.

thunderchief's picture

Keep an eye on silver comex available (not eligible) supply.  They continue to decline, and even when silver spiked to almost 50 in April there was little physical metal being sold back into the market.  You will not see physcial selling until around a 20:1 ratio or lower.  You do the math.

theMAXILOPEZpsycho's picture

Yes but you will see paper selling if the longs get hammered and are forced to liquidate. Like I say, stack some physical if you want; I might do to if it sits above $40 and JPMs stock price...however, I'm still hoping for a dip to go long would be an absolute gift...but sentiment would be much different from the euphoria we seem to be getting today and yesterday...

DosZap's picture

I'll take that bet, you lose.

We won't see $29/$31.00 again, esp if there's a QE3.

DosZap's picture

I'll take that bet, you lose.

We won't see $29/$31.00 again, esp if there's a QE3.

newstreet's picture

Carthago delenda est.

johnnymustardseed's picture

QE3 will give the Blythe the free money to short the shit out of the PM's. I expect that the game will continue. Use the down days to buy more physical.

chinaguy's picture

USD/CHF @ .815 what the fuck? glad I'm long CHF @ 1.10

BTW - nice to see the PM bugs back out. They were pretty quite there for a couple of months - LOL

bigwavedave's picture

now thats golden. CHF is your go to money. always has been. convertible anywhere into anything. even my local bar take CHF (on the paradise island of Bali)

DosZap's picture

bigwavedave, what does it take to live on Bali?.

DosZap's picture

Just waiting for the inevitable, also, where are the SINCLAIR bashing fools.?

Franken_Stein's picture


The good thing about this is that Ron Paul has finally realized that he needs to ask SHORT questions with NO nested sentences in it.


This way the questions are becoming much more painful and pinpointed and everybody can follow and understand them, even the pinheads.


And you get clear and unmistakable answers.


Very good.


NidStyles's picture

Well the previous questioning was just him feeling up Bernanke to get an idea what sort of guy he is. Dr. Paul is a crafty old guy. Not much get's past him, if anything at all. Not even a slippery snake like the Bernank could hold out for long.


Yes, I'm a fan of Ron Paul. After having talked to him on a few occasion's, I can tell the man is about as Intelligent as they come. It's a good thing he has that thing called a conscience, otherwise he would be dangerous.

theMAXILOPEZpsycho's picture

Don't get me wrong, I'm pretty much an "all inner" on precious metals; its just with about 20-25% of the potrfolio, plus what I've earned from my job the last couple of months I play around with, add some, take some off the table, go long, buy puts etc etc in an attempt to leverage up and use insurence. I've made some good moves and some bad ones - overall I think its worth it...

If silver sits comfortably above $40 and JPMs stock price I'll tentatively add to my stash; but I'll still be watching the game very closely to see whats going on with the debt ceiling, Greece etc. I think the elites/pigmen/whatever you want to call them still have some tricks up their sleeve. But for sure, for the long term I'm very happy sitting with most of what I have in precious metals

Hephasteus's picture

Holy Bejeesus. I thought they were going to try to save silver. Looks like it's not working out. Should be a new record soon.

OldTrooper's picture

I think the reason people hold gold is as protection against of what we call tail risks, really, really bad outcomes. And to the extent that the last few years have made people more worried about the potential of a major crisis then they have gold as a protection

Yeah, that's right, Ben.  And that's exactly why I am, and will remain, a buyer.

mess nonster's picture

Someone on ZH once said gold is for saving, and silver is for spending. Something like that.

The fiat debt equivalents would be.. (I think) paper assets like bonds, for saving, and cash for spending- all paper.

o doubt PMs will go higher- much higher, as the final nails in the cofin of the debt-based montary system. Everyone's broke, ad can't pay their bills, from me, all the way up to entire nations. If it really is scalable, then, even though I can't pay my bills, I am not selling PM's to pay them, I must assume that's also true on the highest levels as well. Bye bye debt-based money!

Fix It Again Timmy's picture

"I remember a German farmer expressing as much in a few words as the whole subject requires; 'money is money, and paper is? paper.'" - Thomas Paine - Note: and this is from over 200 years ago...

Bansters-in-my- feces's picture

The Bankster assholes think that their is Monetary gold...thats for bankers.

And peasants gold....thats the gold the banksters have not managed to steal yet,but have asll intentions of making it monetary gold.

I shit you not,they class their gold"monetary gold".....

Don't you wish your gold was "monetary gold"

Delusional fuck waddBernanke....go swallow some more Rothschilds cum...

trevorparsons's picture

Any thoughts on how the D-F legislation that goes into effect tomorrow is going to play out for gold?