The price of gold is currently
$1558.30 $1562.40 $1565.70 – up $ 22.50 $26.40 $29.90 today and the 14th record set in April. The major factor for this increase is not the decline in the value of the dollar but the demand across the world to increase reserves. This will offset economic downturns prior to abandoning the dollar as the world’s currency. The cost of gasoline and food is now being felt in the United States and no relief is expected.
The following article details that central banks are buying gold. If you want to know what is going to happen in the economy, ALWAYS look to the banks. As in Atlas Shrugged, see what the looters are buying to protect themselves since they are the people who are controlling the economy and governments.
Gold-Buying Central Bankers May Extend Record Rally
Central banks that were net sellers of gold a decade ago are buying the precious metal to reduce their reliance on the dollar as a reserve currency, signaling demand that may extend a record rally in prices.
As developing countries accelerate purchases, gold may reach $2,000 an ounce this year, compared with a record of $1,538.80 yesterday in New York, said Robert McEwen, the chief executive officer of producer U.S. Gold Corp. Euro Pacific Capital’s Michael Pento, who correctly predicted gold’s highs for the past two years, forecast a 2011 high of $1,600.
Prices reached a record 14 times this month on demand from investors seeking an alternative to the dollar after the currency slumped to the lowest since 2009, U.S. debt widened, and the Federal Reserve signaled April 27 that borrowing costs will remain near zero percent for an extended period. The economy in China, the biggest foreign holder of U.S. Treasuries, grew 9.7 percent in the first quarter.
“China is out to have more gold than America, and Russia is aspiring to the same,” McEwen said yesterday in an interview in New York. “When you have debt, you don’t have a lot of flexibility. China wants to show its currency has more backing than the U.S.”