Gold News

Gold rises vs. all major currencies as confidence flees central banks

Spot Gold Prices leapt higher in London on Thursday, touching new 27-year highs at $738 per ounce and also breaking against the other four major world currencies.

Because even as the Dollar sank on the broader markets – down to a new low versus the Euro and crude oil – Thursday's move in the Spot Gold Price didn't simply mark fresh weakness in the US currency.

Gold on Thursday hit a 16-month high against the Euro, finally moving above €523 per ounce after lagging the gains in Sterling- and Dollar-gold prices since the start of September.

In London – and with all confidence in Mervyn King at the Bank of England shot by a series of policy U-turns and an "unconvincing performance" before a parliamentary committee today – gold jumped to £366.85 per ounce, taking its gains for the month above 10% for British investors.

Japanese investors wanting to Buy Gold Now will now find it above ¥84,050 per ounce, very nearly the highest price since Nov. 1984. Gold has very nearly tripled against the Yen since the Bank of Japan slashed its lending rate below 0.5% in 2001 in a failed attempt to end the debt-deflation caused by the Tokyo banking sector's reckless lending during Japan's late 1980s property bubble.

The Canadian and Aussie Dollars both helding around six-month lows against bullion today. But while these commodity currencies continue to lag the wider bull market in gold, this global re-allocation to gold bullion is very different from the short-term spike seen in May 2006.

Back then, gold moved higher together with stocks and long-dated bonds. Now those paper assets are slipping back while gold attracts a genuine safe-haven bid from private investors and – more crucially – from savers.

So it's no surprise to learn that "Standard Bank eyes more physical gold trade in Japan," as Reuters reports today, adding that "Barclays is to offer more commodities ETFs" in Japan, too. "Lehman Brothers launches commodity fund," says Investment Week.

Gold's new 27-year against the Dollar is likely to make headlines in Friday's press, too. A rash of new price targets broke out today, with TheStreet.com confessing that "chart watchers say it's difficult to predict where technical resistance may kick in next and stall the current surge."

But whereas people jumped in to gold last May, they're now jumping out of everything else. Private individuals from Britain, the United States and Europe are all making a strong allocation of their savings and wealth to Buy Gold – and they're looking to park it there for as long as their confidence in central bankers and official currencies remains dented.

What's the cheapest, simplest, safest and most direct route to Buying Gold Today? To claim a free gram of gold – vaulted on your behalf in Zurich, Switzerland – click through and learn more about BullionVault now...

Adrian Ash is director of research at BullionVault, the world-leading physical gold, silver and platinum market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and he has now been researching and writing daily analysis of precious metals and the wider financial markets for over 20 years. A frequent guest on BBC radio and television, Adrian is regularly quoted by the Financial Times, MarketWatch and many other respected news outlets, and his views from inside the bullion market have been sought by the Economist magazine, CNBC, Bloomberg, Germany's Handelsblatt and FAZ, plus Italy's Il Sole 24 Ore.

See the full archive of Adrian Ash articles on GoldNews.

Please Note: All articles published here are to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please review our Terms & Conditions for accessing Gold News.

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