Continuing Negative Real Interest Rates Sees Gold Rise Above $1,700/oz

Tyler Durden's picture

From GoldCore

Continuing Negative Real Interest Rates Sees Gold Rise Above $1,700/oz

Gold’s London AM fix this morning was USD 1,713.00, GBP 1,091.10, and EUR 1,300.59 per ounce.

Yesterday's AM fix was USD 1,659.00, GBP 1,064.08, and EUR 1,277.04 per ounce.

Gold rose 2.5% yesterday and broke $1,700/oz to $1,712.80, its biggest one-day gain in the past 4 months, as the US Federal Reserve’s 11 out of 17 members voted that interest rates would likely remain near zero into late 2014.

Investors sought safe haven refuge into gold fearing their portfolios would lose value as Central Banks flood the markets with loose monetary policies and more cash for governments that can't seem to manage their balance sheets.  A group of 7 major economies now have interest rates that average .5%.   

Spot gold rose 2.7% to $1,710.44/oz by 4:33pm EST (21:33 GMT). 

Technical buying also propelled prices after the metal broke above its 100 day moving average for the first time in 1-1/2 months.

Silver also rallied up 4%.  Today's Comex February gold option expirations will show more activity in the gold markets. One trader stated that gold's gains on Wednesday could be due to a huge cover on a short position before today's option expiration.

For breaking news and commentary on financial markets and gold, follow us on Twitter.

NEWS
(Reuters)
Gold rises to 6-week high on Fed rate vow

(Bloomberg)
Fed: Benchmark Rate Will Stay Low Until ’14

(Forbes)
Update: Gold Reclaims $1,700 After FOMC Statement Signals Fed More Dovish Than Thought

COMMENTARY
(MarketWatch)
The Federal Reserve on gold and silver

(The Street)
Gold Prices Soar as Fed Commits to Easy Money 

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bullionbaron's picture

Gold has charged through the downtrend from the September 6th high of $1923. Back above the 50 Daily Moving Average as well. Looking bullish as is Silver, although needs to take out $38...
http://www.bullionbaron.com/2012/01/charts-gold-surges-happy-australia-d...

Silver still has a long way to rise until we could be considered at bubble prices: http://www.bullionbaron.com/2012/01/silver-bubble-what-silver-bubble.html

Though I definitely think we are on the cusp of Silver and Gold heading parabolic into the bubble phase of the bull market: http://www.bullionbaron.com/2011/12/goldsilver-on-verge-of-bubble-phase....

Pants McPants's picture

Oh cool!  You agree with yourself & cite yourself as proof.  I guess we can rule out schizophrenia.

PLEASE stop pimping your blog.  Cripes.  If it were any better than ZH I'd already be reading it.

Badabing's picture

The buzz recently, has been that gold buying by the big players, has bypassed the comex and London exchange and gone directly to the miners.

If true the only way to keep the gold ponzi going is for the nationalization of the mining industry and channeling the physical gold through the exchanges delivery system. But the bankster/gov./PTB will make the best of a situation and pump and dump before the move to mine nationalization. I’ve been watching the gold bug index for many years and always wondered why the HUI/GBI didn’t follow the gold market lately.

Well yesterday from noon to 4pm the HUI went from 495 to 530 a 7.2% rise in 4 hours! This ZHeeple is not normal for the last 4 years. Something is up!

http://finance.yahoo.com/q?s=%5EHUI

 

 

youngman's picture

The Chinese turned back on today.....their holiday must be over

bullionbaron's picture

Their real estate bubble is bursting, they will drive the last great bubble of our generation, Gold and Silver.

Rakshas's picture

If they are paying for oil with Au the dynamic is going to change somewhat from strictly investor interest/store of wealth..... well til this time next week anyway

Quintus's picture

Isn't that 'Gold for Oil' just a figment of Debka's imagination or has there been any reliable confirmation?

The story is everywhere, but seems completely speculative and unconfirmed as far as I can see.

Don't get me wrong, I'd love it to be true, but it seems that everyone is getting a little carried away with themselves.

GetZeeGold's picture

 

Someone is just begging for Tyler to take him to the woodshed.

 

 

Long-John-Silver's picture

I remember someone being put in a wood chipper feet first. I can't remember if it was Meth Man or Johnny Bravo.

Pants McPants's picture

The Karl Hungus treatment (can't remember his name in Fargo).  Ouch.

akak's picture

I can't remember if it was Meth Man or Johnny Bravo.

"Only $5 to dig from the ground!"

A phrase which will live in Zerohedge infamy.

Rakshas's picture

Hard to say how much cred you can give these reports, but given the fantasy of finance in this nutty world why the hell not just go with it;

from RT

http://rt.com/news/iran-india-gold-oil-543/

From the MSM:

http://www.youtube.com/watch?v=MUL_VgxxYus&feature=related

Chaffinch's picture

Thanks for the RT link. Sounds like a credible story to me...

Has anyone read the crappy Marketwatch article referenced above? How do these idiots manage to hold down a job, writing such drivel?

TheDriver's picture

RT did nothing more than source and unsourced DEBKA article.

Backspin's picture

Could someone comment on the reliability of RT as a news source?  TIA.

mick_richfield's picture

Don't know RT, but in this case they are directly referencing Debka, which is not a noted truth-teller.  They speak for effect. 

ParkAveFlasher's picture

A link from last year sheds some more light on the Iran-India-US-EU-China relationship, yes it is that complicated:

http://rhgroup.net/notes/the-india-iran-oil-payment-crisis

mick_richfield's picture

In an asset bubble prices always rise rapidly.

When prices rise rapidly, that is not always a bubble.

These two things get equated a lot lately.  Falsely.  Revisit the definition.

Pope Clement's picture

RT has given Max Keiser his own show while CNBC has given one to Cramer so have to assume that RT has more integrity...

Bansters-in-my- feces's picture

Hey bullionbaron.

Fuck off and die.

 

Savonarola's picture

It's worse than that.

Most popular show on TV:  Gold Rush

Most popular movie rental on Netflix:  The Treasure of the Sierra Madre

Newest vacation trend: Gold mining getaways

flattrader's picture

Gold mining getaways???

Real gold mining is filthy and dangerous.

This sounds like more fun.

http://www.craterofdiamondsstatepark.com/

tmosley's picture

I went there a couple of years ago.  Tons of fun, even if you come away with nothing.

Not far to Hot Springs, either.  Head there afterward for a nice bath in the springs.  Hard to beat that.

flattrader's picture

Good to know.  Looks fun. A friend told me the best time to go is at sunrise and/or sunset when the sun is low on the horizon and you can occasionally see the gems glint in the sun if you have your back to the sun and the plowed field in front of you.  I would think if you worked in a team with handheld radios, you could guide your partner to where you see the glint.

Spa time in Hot Springs and then north for a run on the Buffalo National River.

Yep. This year's summer vacation plans are about to change.

Long-John-Silver's picture

Most popular show on TV:  Gold Rush

 

I've been watching it. I have more physical gold then they have mined so far. I purchased it for less than what they have spent on equipment.

Savonarola's picture

Good point. The Hoffman crew, the Dakota Boys, The Schnabels are true gold bugs. The only guys getting rich are their suppliers.

Poor Parker Schnabel. Works like a dog. We need more kids like him in this country. 

How about when his mother showed up at the mine? Classic.  

trav7777's picture

Everyone gettin rich because the advertisers pay big.  The show is just a drama where they have actual construction equipment on set instead of props.  Parker got the mine because Discovery paid him to run it for another season.

Dakota really did lose his house tho...

Snidley Whipsnae's picture

Long John Silver... I have tried to watch that show a few times. When first I stumbled across it, I thought it was a sitcom. Now I believe that the show must have received a large injection of cash from the producers or the 'gold miners' would have been tits up long ago.

MSM seldom does anything without a reason. Perhaps the goal of the show is to scare potential small investors away from mining stocks and into gold/silver ETFs? After all, most small investors have never been near a gold claim and have no clue how explorers/miners go about getting gold out of the ground and into coin/jewelry/bullion form.

One good thing about the show; It sheds light on how clueless most people joining gold rushes are... and also explains why so few 'miners' returned from California/Alaska/et al, gold rushes with less money or gold than they started with. If the show contained less commercials I might watch an entire episode.

 

 

ParkAveFlasher's picture

Meanwhile, in that gold-mining juggernaut Down Under, the Aborigines are flashmobbing the PM.  Can't imagine that it may have anything to do with mines on Aboriginal lands, new PM exchanges opening, the price of gold, etc.

PaperBear's picture

$1,800 by next week, $2,000 by end of February.

mrgneiss's picture

Nice to see the usual OpEx monkies get caught with their pants down.........

Snidley Whipsnae's picture

mrgneiss... Imagine, The Fed announcing more ZIRP mere hours prior to options expiry. There must be some scrambling at the JPM and HSBC desks... or, there is some other news coming down the pike to help save the shorts.

As I posted a couple of days back... Fed's birthday cake decoration should include ZIRP FOREVER displayed prominently on the top... and also should include "our new mandates 1) Screw the savers 2) Screw the Main St economy 3) We don't need no stinking election cause we bureaucrats are calling the shots"

 

mrgneiss's picture

Yes Snidley, the FED's birthday is coming up - happy 100 to the Oligarchy!

toadold's picture

Gold,gold, gold, sliver, gold, spam, beer, guns, ammo,gold, gold , gold silver and beeeerrrrrrr. 

Bobbyrib's picture

Seriously, I'm buying a beer brewing kit so when TSHTF I can brew my own beer since fresh beer may be in short supply months after.

Long-John-Silver's picture

Your wasting time and money brewing beer. You need to get a moonshine still instead. The economics of shine far outpace beer and it will provide a wealth stream in a barter society. This site will provide you with all the information you need.

flattrader's picture

If "fresh beer" is in short supply, so are "fresh" brewing supplies.  A "kit" won't get you much beer if you don't have grains, malt, yeast etc...stockpiled.

You can make wine out of damn near anything.  No heat needed.  No need to put it under pressure.

I can do all three. Distill, brew, vint.  Vinification is the easist...low profile, low cost.

I participate in a "Prison Wine" competition occasionally.  It's amazing what you can do with scavanged ingredients.

Tao 4 the Show's picture

The question is always whether the current PM action is loss of control, measured pressure release, or ... deliberate. The latter may sound crazy, but I think there is some chance that the Fed wanted to amplify their statement with some dramatic PM action. I think the signal is on that election year liquidity is beginning in full force - the flood gates are opening. And the dogs are dutifully slobbering.

Sean7k's picture

Well, if you believe the comex inventory figures, the dealers are out of gold based on the last three months of deliveries versus deposits. Silver delivered more in January than in December, usually the best month of the year and the US and Canada are having to import silver to meet coin demand- all with the closing of a mine in Idaho. 

Somebody is lying and the comex pants are on fire. Just saying...

 

Snidley Whipsnae's picture

"somebody is lying"...

..........................

"Everybody is lying"... I'm just trying to help out.

After MF Global we camels got a peek under the tent... Justice Dept can't porsecute the theives at MF/JPM because the fraud, hyperhypothacation... did I mention fraud?... is too widespread and would require a lot more 'white collar jails' to hold the guilty...

Next will be "Justice Dept decides to cancel prosecutions due to budgetary constraints".

mrgneiss's picture

Yes, I don't think having more bankers and brokers in jail than out would send the proper signal to the financial world...........

Chaffinch's picture

Couldn't they turn the whole island of Manhattan into a huge white collar prison?
; )

Snidley Whipsnae's picture

It's already a virtual prison... except for the TBTF that commute to their high dollar gated communities.

How long untill TSA requires 'travel permits' to cross state lines, board a commercial flight, get on a bus or train?

Those in chauffeured vehicles will be waved through the checkpoints.

apberusdisvet's picture

There are some that claim that Debka is a CIA disinformation site setting the stage for a new world currency and hammer another nail in the USD coffin.  About as logical as any other conspiracy theory.  What I find interesting is that India has refused to confirm or deny that it will trade gold for oil.

Snidley Whipsnae's picture

Whatever happened to the 'new plastic currency' that was designed and put into production at mints... only to find that 'it's too complicated to manufacturea and some of the bills contain wrinkles.

If I was sitting on large stacks of 'old' or currently in circulation hundred dollar bills I believe that I would be converting as many as possible to fifty and twenty dollar bills... a real pain in the ass but maybe a good move. Usually the larger bills are called in first.

Got_Nukes's picture

Not following your convertion reason.  Can you elaborate? "Usually larger bills are called in first."

Snidley Whipsnae's picture

I will not elaborate here... Just think about it... and, think about what happens when a soverign decides to switch from a useless currency to a 'new currency'.

For starters, check out what happened in Weimar Germany.

Think about this... no fiat currency has lasted more than forty years.

Calling a currency and reissuing can be justified by all manner of excuses... Said excuses are stated on MSM by the TBTF... 'the law givers'...

Are you aware that the Fed/Treasury were considering (a couple of years ago) of 'time dated currency'? If not used by expire by date it would be valueless.

There is no end to the tricks and who is to stop them?

mrgneiss's picture

You're on fire today Snidley!  Did you just make a nice pile?