Surging Oil And Deepening Inflation – Gold & Silver Rise To Record Nominal Highs At $1,459 And $39.50
by Tyler Durden
Surging Oil and Deepening Inflation – Gold & Silver Rise to Record Nominal Highs at $1,459 and $39.50
In trading in London this morning, gold reached a new record nominal high ($1,459.07) and silver a new 31 year nominal high ($39.50) as investors bought the precious metals to hedge deepening sovereign debt risk (in the EU but also in the US with the threat of a federal budget shutdown), geopolitical risk and deepening inflation.
Brent crude reached $123.00 a barrel this morning and looks set to challenge the high seen in July 2008 of $145.49.
Anemic economic growth, extremely loose monetary policies, sovereign debt risk, geopolitical risk and surging oil and commodity prices is a recipe for stagflation which would see the precious metals replicate their performance of the 1970’s when gold rose 24 times in value (from $35 to $850) and silver by over 32 times (from $1.55 to $50).
Silver over $100/oz is not as outlandish as once thought with dealers in Hong Kong mooting that possibility. Strong demand for silver is being seen in Asia (see news).
The yen and sterling have fallen today leading to new record nominal highs in yen and sterling gold again targeting the £900/oz mark.