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April 10, 2013

Release Date: 
Wednesday, April 10, 2013

Gold and silver prices fell significantly in morning trading on the New York Spot Market with gold shedding more than $25 and silver down $0.29. Analysts point to a revised forecast from Goldman Sachs lowering its 2013 average gold price by $65 along with minutes from the Federal Open Market Committee which disclosed one member suggesting a slowdown on quantitative easing. Gold prices were further affected by Cyprus’s announcement that it would sell more than half a billion dollars’ worth of gold reserves as part of its bailout.  (“Gold loses over 1% after Goldman forecast cut, Fed,”MarketWatch, 4/10/13.) You can see the most current spot prices here.

Noted precious metals analyst and currency trader Jim Sinclair warns of an economic conflagration due to the unrestrained printing of money. “The entire world is on fire and most people don’t even realize it.  The world is literally ablaze with the creation of money, and there will be hell to pay for what is taking place right now... Economic law cannot be held at bay, eventually it will deliver chaos because of the creation of enormous amounts of paper money… With the printing presses wide open what we are really witnessing is monetization of debt.  Monetizing debt has always resulted in inflation, and this degree of monetization will result in a disastrous hyperinflation.” (“Sinclair – The World is On Fire & There Will Be Hell to Pay,” KingWorldNews, 4/9/13.)

The European Commission warns the Italian, Spanish and Slovenia's economies are “worryingly imbalanced.”

“SPAIN is experiencing excessive macroeconomic imbalances. Although adjustment is taking place, the magnitude of the necessary correction requires continuous strong policy action. In particular, very high domestic and external debt levels continue to pose risks for growth and financial stability….

“ITALY is experiencing macroeconomic imbalances, which require monitoring and decisive policy action. In particular, export performance and the underlying loss of competitiveness as well as high public indebtedness in an environment of subdued growth deserve continued attention in a broad reform agenda in order to reduce the risk of adverse effects on the functioning of the Italian economy and of the Economic and Monetary Union, notably given the size of the Italian economy…

“SLOVENIA is experiencing excessive macroeconomic imbalances. Urgent policy action is needed to halt the rapid build-up of these imbalances and to manage their unwinding.” (“COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL AND TO THE EUROGROUP,” European Commission, 4/10/13.)

The World Trade Organization lowered its global trade growth forecast again, noting that “structural flaws” persist in the world’s economies. The WTO originally projected global trade would increase by 5.6%. It now projects the growth to be 3.3%. (“WTO Global Trade Growth Forecast for 2013 Lowered to 3.3 Percent,” Bloomberg, 4/10/13.)


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†This material has been prepared for private use. Although the information in this commentary has been obtained from sources believed to be reliable, Goldline does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice.

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