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Wednesday, June 9, 2010

Record Gold Prices Continue as Currencies Falter, Recession Lingers

Gold futures continue to break records, and they will for some time to come, as there's absolutely nothing standing in the way of price increases based on the economic conditions we face, unless you want to listen to Federal Reserve Chairman Ben Bernanke, who came out of hiding to announce we're continuing on in an economic recovery (laughter in the background).

While I don't believe we've ever been in a recovery, as the spending of trillions hasn't been able to stem the downward spiral of the economic tide we continue to face, while adding to our national debt in the United States, and other countries as well who have participated in similar practices to no avail, as Europe is showing us all in its sovereign debt crisis.

Yesterday gold again broke a record high, ultimately settling at $1.245.60 on the Comex division of the New York Mercantile Exchange.

There are no quick solutions to the flat American economy, no quick solutions to the European sovereign debt crisis, and no quick solutions in China's attempt to stem the tide of inflation emerging from their urban property market, which has and will continue to reduce demand for raw materials like copper, although they will still grow, albeit at a much more sustainable pace than in the past.

Add this together and you have gold prices continuing to go up for some time into the future.

This doesn't mean their won't be short term corrections based on all sorts of variables, like speculators and traders covering positions they've lost money in in other sectors, and many just taking profits.

But overall, there is simply nothing out there other than concerns over too much optimism in the gold market which could drive up gold prices more speculatively.

Because of the fundamentals and safety concerns emerging from those fundamentals, even if speculators drive prices up at times, it doesn't negate the safety factor and fears over weakening and untrustworthy paper currencies as a result of unprecedented spending by central banks and governments around the world.

There is no recovery in the short- or mid-term, and that will mean gold will continue on its upward journey during that time.

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