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Gold may rally further from this month’s record if President Barack Obama wins lawmakers’ agreement to raise the U.S.’s debt ceiling, weakening the dollar and boosting demand for the precious metal as a store of value, according to Korea Investment & Securities Co. [Below is a chart which shows this quite clearly.] Words: 360
So say Sungwoo Park and Saeromi Shin in a Bloomberg article* which Lorimer Wilson, editor of www.munKNEE.com (It’s all about Money!), has further edited ([ ]), abridged (…) and reformatted below for the sake of clarity and brevity to ensure a fast and easy read. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement. The article goes on to say:
The chart [below] shows [that] the spot gold price in [U.S.] dollars has climbed along with increases in the U.S.’s statutory debt limit over the past 16 years…
“Gold’s rally is quite explosive,” said Julia Yoo, a Seoul-based analyst at Korea Investment. “Increasing the debt limit means you print more dollars, which will weaken the dollar and consequently lift the gold price.”… Gold has climbed 33 percent against the U.S. dollar over the past year, outpacing all of the more than 150 currencies tracked by Bloomberg.
“The debt ceiling is important in 2011 given the dangers of a technical default in the U.S. and the increasing focus on sustainable debt levels going forward,” London-based Michael Lewis, head of commodities research at Deutsche Bank AG, said in an e-mailed response to questions [going on to say]: “Although I expect we can avoid a technical default, if it were to occur I would expect to see more downside risks to U.S. equity markets and additional upside in the gold price.”
*http://www.bloomberg.com/news/print/2011-07-19/gold-to-extend-record-rally-if-u-s-increases-debt-limit-chart-of-the-day.html
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Editor’s Note:
- The above article consists of reformatted edited excerpts from the original for the sake of brevity, clarity and to ensure a fast and easy read. The author’s views and conclusions are unaltered.
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