Gold, Silver Reach New Record Nominal Highs


"Silver is particularly strong and the euro weak on sovereign debt contagion concerns."

Gold and silver have reached new all-time and 31-year record highs in trading in London this morning.

Silver is particularly strong and the euro particularly weak on sovereign debt contagion concerns.

Inflation and sovereign debt fears are leading to continued safe haven demand. It is as important as ever to note that the record highs are nominal highs and inflation adjusted gold and silver remain a long way from their respective highs of $2,400/oz and $140/oz in 1980. These inflation-adjusted highs remain viable long-term price targets.

Precious metal prices at record highs are symptomatic of the degree of macroeconomic and geopolitical risk in the world today. These risks do not look like dissipating anytime soon, which will likely lead to higher precious metal prices.

Gold at $1,500/oz. and silver at $50/oz. remain short-term targets. Resistance levels have been breached and, thus, these psychological price points will likely now be tested. Trading and timing markets remains high risk but astute hedge funds and other traders will continue to "make the trend their friend."

Risk of contagion in the eurozone and internationally remains real. Already seriously indebted taxpayers in many Western countries are set to struggle with the massive liabilities incurred from bailing out Western banks.

This is leading to the possibility of even more quantitative easing, a massive increase in money supply and currency debasement on a scale not seen since our modern monetary system came into existence when Nixon announced that the U.S. would no longer convert U.S. dollars to gold and the world entered the era of fiat paper currencies not backed by precious metals.

The record highs were greeted with little coverage and no fanfare. What little coverage there is, remains almost exclusively in the specialist financial press.

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