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Gold Hits $1000 For First Time

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Guest Steve Cook

gold hovering at 998 a couple of mins ago. Just checked back onto the kitko site and it wont open. Neither will the usa gold site. Crashed due to too much traffic?..... :lol:


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Are you paid in $?

If not, why do you care about the raise of gold in $?

Do you know that the $ is in freefall?

The rise in the price of gold indicates the lack of confidence investors have in other assets, such as bonds and equities. The less capital US companies have to invest, the worse the prospects for economic growth in both the US and their worldwide subsidiaries and also a worse outlook for those exporting to the US. It also means reduced share prices, putting at risk deals dependent on those assets. This is one reason why so many hedge funds are facing problems.

Commodity prices generally have appreciated significantly over the last 6-12 months, faster than the dollar has depreciated. Gold isn't the only one, look at oil, wheat etc. Despite the recent action taken by the Fed, the continued rise in gold and oil prices indicates the market continues to have doubts over the future performance of the US economy in particular.

Commodity price rises are a source of inflation.

Central Banks normally use interest rates to expand or contract the money supply according to the prevailing economic needs. At times of high inflation they increase rates to fight prices rises; at times of slow economic growth they reduce rates to stimulate growth.

Now comes the killer.

With the emergence of the credit crunch, the credit markets have seized up and borrowing has become difficult. With toxic debt swilling around the system banks are refusing to lend to each other and thus lend to businesses and consumers. Economic growth is being hampered. To ease this problem and allow growth to continue, the Central Banks should consider rates cuts, but with inflation becoming a pressing issue they also have to consider increasing rates too. The question is which do they go for?

The credit crunch has scuppered the usual economic rules and the dichotomy poses the of risk stagflation : economic recession with inflation and unemployment. This would be painful to live through.

That's partly why I pay attention to the price of gold; it's consequences for the economic outlook.

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Guest Steve Cook
Just saw spot 1000.60

not showing on mine....still hovering in the 997-998 region

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  • 292 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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