Syria News Sends Gold and Safe Haven Treasuries Higher
Dan Norcini
GoldSilverWorlds.com
August 27, 2013
There are two news stories serving as catalysts for the move higher in gold in today session.
The first of these is talk that the US is planning on lobbing some cruise missiles into Syria in response to unsubstantiated reports that the Assad regime has used chemical weapons against civilians. The has the attention of not only the safe haven markets, (the Yen is also getting another one of those goofy safe haven bids) but also the crude oil market, which is soaring moving above $109 at one point in the session.
The second news item is that the US is up against that pesky debt ceiling once again. It never ceases to amaze me how damned inept these politicians are and how they cannot live within their means.
Either way, that has the focus of the markets back on the US fiscal house disorder which is helping to put a bit of pressure on the Dollar in spite of the fact that global investors want to own the thing whenever a crisis or shock event appears on the radar screen.
I mean the entire thing is weird. Here we are talking about a nation that is running over $17 TRILLION in its national debt ( and remember we are not even talking about unfunded liabilities here) and there are those who are dense enough that they want to own more US Debt as a SAFE HAVEN. I honestly cannot stretch my mind around the two sets of words ever being coupled together in the same sentence; it is a fact however that the global investment community has been conditioned as well as Pavlov’s dogs to buy the blasted things every time they get nervous.
Gold has run into some pretty good selling at the highs made back in late May/early June after putting in some sizeable gains since Thursday of last week. Working against further gains in today’s session is the weakness in the mining shares ( HUI ) as those are following the broader stock market lower due to Syria fears.
Remember, gold buyers never like to see the shares going lower with the metal moving higher as it makes them nervous and more likely to snatch profits rather than dig in and buy more at the highs. Additionally, gains in gold due to geopolitical events tend to not hold as a general rule unless the events indicate a worsening of the situation. It looks to me like the market has priced in a missile strike; whether that escalates into something further is unclear.
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