Gold rose $7.80 to $934.60 per ounce in trading in New York yesterday and silver was up 22 cents to $17.72 per ounce. Gold and silver continued to rise in Asia and early trading in Europe and gold reached new record highs just below $950 at $949.60 per ounce and silver has surged over $18 per ounce.
Gold also surged to new record highs in British pounds and in euro. The London PM Fix at 1500 GMT yesterday afternoon was at $920. Gold fixed at new record highs at £474.37 and €627.90.
Gold has surged on increasing inflation concerns with yesterday’s stronger than expected and sharply higher US CPI report. With the commodities complex continuing to surge and oil staying above $100 a barrel, inflation will continue to increase significantly in the U.S. and internationally. The Chinese reported inflation at an 11 year high at 7.1%.
Central banks risk creating a very dangerous inflationary spiral should they continue trying to alleviate macroeconomic and systemic risk by lowering interest rates in what is a very inflationary environment.