Gold Prices Today Soar on EU Sovereign Debt Disaster

Black Friday temporarily captured the attention and imagination of traders and investors, but that is already past us and the potential contagion and ongoing disaster related to the EU sovereign debt crisis has them running to gold again for safety reasons.

Gold for February delivery at the Comex division of the New York Mercantile Exchange rose by $17.40 to $1,384.90 an ounce. Spot gold was at 1,384.10, rising by $16.80 as of 2:19 PM EST.

As has happened several times in the recent past, gold ignored the temporary rising value of the U.S. dollar, for imperceivable reasons, has also attracted those seeking safety.

At those times the two ignore the usual inverse relationship and rise together. That could continue to happen in the current economic climate for a short period of time.

Much of that will be determined by the perceived fate and value of the euro against the dollar as the narrative unfolds in Europe.

The problem seems to be the EU and news outlets are not reporting the true depth of the problem, which appears to be far worse than is being let on.

Greece, for example, recently stated their deficits are probably worst than last reported, which implies either outright dishonesty or ineptness; both of which are dangerous to the region, although at lower levels than the obvious repercussions if Spain were to require a bailout.

This seems to be the primary driver of gold at this time, and as long as the euro remains under pressure and the U.S. dollar moves up against it, gold and the dollar will probably rise together.

That will eventually change, but until it does, gold will most likely move up slower than it otherwise would have in light of other economic factors like the quantitative easing of the Federal Reserve.