News Header


Record Gold on European Debt, U.S. Growth Concerns

Release Date: 
Wednesday, July 13, 2011

The price of gold traded at an all-time high of $1,583.10 per ounce at 7:14 a.m. Pacific Time on the New York Spot Market, as concern over the European debt crisis intensified. Worries over U.S. growth also fueled demand for the safe haven asset as minutes from the Federal Reserve's June meeting suggested some members were considering the need for additional monetary easing.
Moody’s Investors Service lowered Ireland’s debt rating yesterday, citing the probability the country will require additional official financing. Ireland joined Portugal and Greece yesterday as the third euro-area nation to have its credit rating cut to below investment grade, or to junk status. The cost of insuring debt from Italy, Spain and Portugal also climbed to new records this week.
“With European sovereign debt fears intensifying again, little clarity on what euro-zone officials intend to do next and cross-asset market confidence taking a bashing,” gold is benefiting, Edel Tully, a London-based analyst at UBS AG, said in a report today. “This should, in theory, be gold’s time to shine as a safe haven and as an alternative currency.”

"The debt crisis is if anything escalating, with ratings agencies now downgrading Ireland into junk territory. You have had rethinking on what should happen," said Credit Agricole analyst Robin Bhar. "We'll know more about thinking on the U.S. when Bernanke testifies, but it was interesting that the Fed, according to the minutes of the June meeting, seemed to bring about more thinking about quantitative easing... those Fed minutes seem to have stoked the fires (for gold)."
Gold “is still going to go for a significant period of time,” Martin Murenbeeld, the chief economist at Toronto-based DundeeWealth Inc., which manages more than $50 billion, said on July 11. “We’re in a very difficult financial period in the world. You have the European situation. The faith in paper currency is rapidly ebbing.”

(Sources: “Gold Rises to a Record as Debt, Growth Concerns Spur Demand as Alternative,” Bloomberg, July 13, 2011; “Gold Hits Record High as Euro Zone Crisis Worsens,” CNBC, July 13, 2011)

News Footer


†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.

You should review Goldine's Account Agreement along with our risk disclosure booklet, Coin Facts for Investors and Collectors to Consider ®, prior to making your purchase. Goldline has a spread or price difference between our selling price, called the "ask", and our buy-back price, called the "bid". That spread varies depending on coin or bar you acquire. Spreads on 1 oz bullion coins, 90% silver dimes and quarters, and one ounce and larger bullion bars are 13%. All other coins have a spread of 28%. There is also a 1% liquidation fee when you sell your coins back to Goldline. The market must go up enough to overcome this spread before an actual profit is achieved. Precious metals and rare coins can increase or decrease in value. Past performance does not guarantee future results. Coins are a long-term, three- to five-year, preferably five- to ten-year investment. We believe precious metals are suitable for 5% to 20% of the average investment portfolio though others may recommend a different percentage.

To receive free information package on gold and precious metals investing, call Goldline at 1-800-963-9798.