Tuesday, October 5, 2010

Gold Futures Break $1,340 Today on Quantitative Easing Assumptions

There seems to be know doubt from the market that the Federal Reserve is going to foolishly launch another round of quantitative easing, further debasing the value of the U.S. dollar. That has gold prices continuing to break records in anticipation of the event, surpassing $1,340 today.

What is even more important for those who understand the significance of this, is it's not only the U.S. dollar gold is gaining against, but a number of other currencies as well. In part that means other countries around the world are participating in the same measures, which is also debasing their currencies.

The quick upward move in gold futures and spot gold is from the market pricing in the actions of the Federal Reserve almost immediately, rather than waiting. Of course there are numerous other factors driving gold prices, but in the short term this is the one everyone is watching closely now.

Investors around the world are escaping their weakening currencies in favor of gold, which is increasingly being considered a currency by many who hadn't thought that way in the past (there has always been some who have).

Around mid-day gold futures for December delivery hit as high as $1,341.20 on the Comex division of the New York Mercantile Exchange; the highest ever for a most-actively traded contract.

With Ben Bernanke in ultimate denial about the disaster of the earlier round of quantitative easing, even alleging it was successful, gold investors know they're in for a long upward ride as he continues his outrageous policy and damage to the U.S. dollar.

This all means that inflation will start to rise soon, adding even more fuel to the fire. All of this is to the benefit of gold.

Major gold companies have strongly participated in the upward run today, including Barrick Gold (NYSE:ABX), Goldcorp (NYSE:GG) and Newmont Mining (NYSE:NEM).

Barrick increased to $47.51, gaining $1.53, or 3.33 percent, Goldcorp rose to $44.34, rising $1.42, or 3.31 percent, and Newmont reached $64.57, growing by $1.83, or 2.92 percent, all at 12:20 PM EDT.

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