US Dollar, Euro (DM before 1999), Yen and Sterling Depreciation Against Gold Since 1900

Today’s AM fix was USD 1,569.00, EUR 1,256.406 and GBP 1,009.0 per ounce. Friday’s AM fix was USD1,570.50, EUR 1,251.79 and GBP 1,005.70 per ounce.

Gold is marginally higher in Japanese yen, flat in U.S. dollars but higher in euros, pounds and other fiat currencies today. Further weakness may be seen in trading today as last week’s 3% fall may lead to follow through selling.

Gold remains higher in all fiat currencies in June and the fundamentals mean that a summer or autumn rally remains likely.

Gold may look for direction from the latest EU summit but financial markets have already toned down expectations of concrete progress and European stock markets are lower and Spanish and Italian debt is again under pressure. The EU meeting will be missed by both Greece’s new prime minister and finance minister due to illness.

Speculators Sell While Long Term Store Of Value Buyers Accumulate on Dip

Managed money longs boosted their net longs in gold by 4,962 to 104,646 lots in the week up to June 19 but their positions remain near record monthly lows showing that the speculative froth has been washed out of the market.

Gold bars and coins at Goldcore’s London office

The fundamentals remain sound with investment demand, particularly from ETFs, Asian demand and central bank demand remaining robust.

Recent weakness is again due to selling from more speculative elements.

Investors and store of wealth bullion buyers have not been selling – quite the opposite most continue to accumulate on the dip.

Of the small amount of people selling bullion in recent weeks – the majority of those sellers sold as they had to sell due to having financial difficulties. Gold came to their rescue as it is, for many, one of the few liquid assets that they can sell in order to pay down debts.

Those with a long term perspective will continue to be rewarded (see chart above) as currencies continue to be debased and devalue versus gold.

Today, fiat currencies throughout the industrial and non industrial world are vulnerable to further devaluation.

There is indeed the real risk that the gradual decline in the value of fiat currencies seen in the last 100 years accelerates.

A coming global monetary crisis will likely result in a massive flight to gold.

In historic times, it is worthwhile having an historic perspective.

For breaking news and commentary on financial markets and gold, follow us on Twitter.

NEWS

Reuters – Gold steadies after weekly drop; EU summit eyed

Reuters – Asian gold bugs eye price weakness, Central Bank buying 

Bloomberg – Central Banks Commit to Ease as Threat of Lost Decades Rises 

Mineweb – Australian gold output falls for 3rd straight quarter 

Reuters – China urges calm after Syria shoots down Turkish jet 

GoldSeek – C Ministry of [Un]Truth

Zero Hedge – Buckler: Keynesian Religion As World War… And The One "Good" Thing About It 

Zero Hedge – As RBS’ ATM "Glitch" Enters Fifth Day, The Bailed Out Bank Issues A Statement 

Market Oracle – Gold Investors Gaining from Economic Exposés and Realities 

FT – The Fed’s Second Best Solution

Mark OByrne

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