Euro and Global Debt Contagion Concerns Mount – Gold New Record Nominal Highs In Euros And Pounds
by Tyler Durden
Europe’s debt crisis has seen gold prices climb to new record highs in euros and British pounds at EUR 1,087.80/oz and GBP 944.93/oz respectively. Contagion concerns are mounting due to the failure of the ECB, the IMF and respective governments to tackle the sovereign debt crisis.
The scale of the debt crisis effecting Greece, Ireland, Italy, Belgium, Portugal and Spain is leading to growing concerns of a knock on deleterious impact on European banks and the global banking system.
The real risk of contagion will likely lead to increasing safe haven demand for gold.
Gold should also be supported today by the OECD’s warning regarding the U.S. and Japan’s very poor fiscal situations and their lack of credible plans to tackle high and spiraling budget deficits.
Gold has broken out in euros and pounds and this strength is likely to again be seen in dollar terms with the record nominal high of $1,577.77 likely to be challenged again.
There is good support at $1,460/oz (see chart above) with strong physical demand seen internationally.
Gold in dollar terms is challenging resistance at $1,527/oz and a break out and close above this level could see a quick move to challenge resistance at the record nominal high of $1,577.57/oz and the psychological level of $1,600/oz.