Gold Over EUR 1,300 – On Way to ‘Infinity’ on Eurozone Contagion?
by Tyler Durden
Deepening geopolitical tensions regarding Iran, Israel and the western world has led to oil rising for six days in a row now and this is also supporting gold. The International Atomic Energy Agency said Iran was developing nuclear-weapons capabilities that gave it “serious concern” about possible military aspects to Iran’s nuclear programme.
Italy’s bond markets are heading the way of Ireland, Greece and Portugal with their 10 year bond yield surging to over 7.45% and the yield curve inverting with the 2 year yield rising above the 10 year.
China’s gold consumption continues to surprise even bullish analysts. China’s gold consumption is expected to jump nearly 50% to reach 400 tonnes this year. Thus exceeding the country’s forecast of more than 350 tonnes. 400 tonnes compares to just 270 tonnes in 2010 which was itself a record month.
Official Chinese annual consumer inflation numbers showed an easing to 5.5% from September’s 6.1%. The savings rate (1 year) is at 3.5% meaning steep negative real interest rates continue in China which is bullish for continuing Chinese gold demand.