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Gold hits five-month high on euro uncertainty

OWoN: May explain some liquidity issues stateside. Hell may come soon.

Gold hits five-month high on euro uncertainty

The Australian Business Review
20 January 2015

Gold has reached a five-month high as investors seek to safeguard their wealth from uncertainty surrounding the euro.

The most actively traded gold contract, for February delivery, rose $US17.30, or 1.4 per cent, to $US1,294.20 a troy ounce on the Comex division of the New York Mercantile Exchange. It was the highest settlement since August 20.

The euro retreated against the US dollar as investors braced for the outcome of the European Central Bank’s policy-setting meeting on Thursday. The ECB is expected to announce a bond-buying program aimed at buttressing the region’s fragile economy. The euro is likely to weaken further in response, having tumbled to 11-year lows against the dollar last week after the Swiss National Bank scrapped its cap on the franc’s value against the common currency.

Gold drew investors who expect the precious metal will keep its value better than paper currencies and other investments, such as stocks, if the euro falls further.

“Europe is certainly the leading focus right now,” Bill O’Neill, co-founder of LOGIC Advisors, said.

“There’s a fear of currency wars and currency volatility, and there’s a high level of uncertainty surrounding the whole euro area,” Mr O’Neill said.


1 comment :

  1. With Its Gold “Vaporized”, A Furious Ukraine Turns On Its Central Bankers
    As reported two weeks ago, following a stunning announcement by the head of Ukraine’s central bank, Valeriya Gontareva, on primetime TV we learned that (virtually) all of Ukraine’s gold was gone, or – in the parlance of Jon Corzine – had “vaporized.”

    And as we also predicted two weeks ago, it was only a matter of time before Ukraine’s people – the vast majority of whom are innocent pawns in a vast game of realpolitik between the west and east – finally got angry and demanded some answers, if not heads. That time came earlier today when as reported “a Kyiv-based court has instructed Kyiv prosecutors to bring an action against National Bank of Ukraine (NBU) Governor Valeriya Gontareva on charges of abuse of power or misuse of office to obtain illegal profit, the Vesti newspaper reported on Tuesday.”


    The charges against the chief banker involve foreign currency interventions by the Central Bank in August 2014: On August 5 the NBU bought U.S. dollars on the interbank forex market for UAH 11.93 per U.S. dollar and sold them for UAH 12.26 per U.S. dollar. During the same week, on August 8, it traded in foreign currency at a higher rate: UAH 12.45-12.6 per U.S. dollar. First it sold $69 million on the interbank forex market at a lower rate, and some days later it bought $35 million at a more favorable price.

    As a result of these transactions, the NBU lost 19 kopecks per U.S. dollar, Kravets said.

    Kravets claims that by acting so, Gontareva “has intentionally committed an extremely unfavorable transaction for the gold and forex reserves of Ukraine, despite the fact that under Ukraine’s Constitution it is the Central Bank that is in charge of maintaining the country’s gold reserves.
    Who ya gonna call? Ghost busters? Look no further than the boogyman creators!


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