Western Governments Try Everything To Preserve Their Fiat Currencies

Thursday, December 12, 2013
By Paul Martin

David Levenstein
December 11, 2013

In spite of a string of strong economic data from the US, the dollar failed to stage a solid rally against other major currencies last week, and the price of gold found support above $1200 an ounce.

The global gold market was relatively choppy during the week as traders awaited the latest employment report from the US as well as other economic data and a decision from the European Central Bank (ECB).

As to be expected, the price of gold dropped initially on the latest US non-farm payroll report but soon bounced off the lows of $1211 an ounce. And, once again, as Nanex showed, the price of gold fell a mere seven seconds before the report was released. On December 6, 2013, at 8:29:53, which was seven seconds before the 8:30 AM scheduled release of the latest employment numbers, the price of gold as measured by the February 2014 (GC) futures contract plummeted almost $6 on about 600 contracts traded in 50 milliseconds.

At 1.6 seconds before the news release, about 2,000 March 2014 5-Year T-Note Futures contracts sent prices down so fast, that trading halted for 5 seconds: which included the time of the news release. The same thing happened during the Employment numbers release in June.

Meanwhile, the Dow Jones and S&P recently made new all-time highs. The DOW rebounded strongly after dropping to as low as 15791 and closed above the 16000 handle at 16020. At the same time the S&P 500 also closed back above 1800 level at 1805. The yield on the US 30 year note closed at new high of 3.917% and the yield on the 10 year note also closed higher at 2.883%.

Over the weekend, it was reported that China had its biggest trade surplus in almost five years. In November, China’s trade surplus rose to $33.8 billion from $31.1 billion the month before. Exports staged a rebound, rising 12.7% from November last year, well ahead of October’s 5.6% growth. But, imports grew a more modest 5.3% year-over-year.

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