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Gold Price Climbs Through $1,380

Release Date: 
Tuesday, January 11, 2011

GOLD PRICE NEWS – The gold price climbed $8.35 to $1,384 per ounce Tuesday morning, rallying on the back of news that Japan will join China in purchasing the sovereign debt of Europe. The price of gold moved back toward $1,400 per ounce after Japan’s Finance Minister, Yoshihiko Noda, announced his country’s support for the struggling nation’s of Europe. The Bank of Japan will purchase the sovereign debt of struggling European nations such as Portugal.

As the gold price has continued to rise amid declining confidence in fiat currencies, it has slowly begun to reassume its role as currency. A small but growing list of instances of gold being used as a medium of exchange has emerged. The latest example centers on India, where the Economic Times reported that the nation is considering settling crude oil payments from Iran with gold “before the two countries agree on a mutually accepted currency and a bank to clear the transactions.”

Although the story does not provide details, both India and Iran have recently raised their exposure to the price of gold by increasing their gold holdings. In November 2010, Iran announced that it converted approximately 15% of its foreign exchange reserves into gold. Meanwhile, in November 2009 India purchased 200 tons of gold from the International Monetary Fund, valued at $6.7 billion at the time.

Later today the Fed’s Beige Book will be released and investors will scrutinize the outlook for both growth and inflation in order to determine whether monetary policy will be normalized in coming quarters. The Producer Price Index (PPI) will be released Wednesday morning, while the Consumer Price Index (CPI) is scheduled for Thursday morning.

If this week’s economic data comes in better than expected and inflation begins to tick higher, then the gold price may face renewed selling pressure. If however the reports echo those of last week’s disappointing employment report, the price of gold is likely to resume its longer-term uptrend and may challenge its record high of $1,431 per ounce sooner than many expect.

Article provided by GoldAlert.com.


This article is independently provided by GoldAlert.com and does not represent the views or opinions of Goldline International, Inc. Although the information in this article 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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†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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