Gold News & Info

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold added another 0.1% after the Bank of Japan surprised the markets by expanding its program of quantitative easing by 10 trillion yen, or $126 billion. In a paradoxical session, global equities and U.S. Treasurys both rallied as investors were at once encouraged by new global stimulus and worried about the conditions that warrant it. Risk appetite was further encouraged by news that existing U.S. home sales surged by nearly 8% in August and new home starts rose by 2.3%. However, adding to general risk aversion, new rifts developed among eurozone leaders over how to structure the new pan-European banking authority that will be crucial for saving the euro. Gold reflected these conflicts by rallying above $1,781 to a new six-month high before settling back by $10 an ounce in heavy trading. Silver also rallied to a new six-month high before settling with a loss of 0.4%. Platinum and palladium, more heavily tied to industry, added 0.3% and 0.9%, respectively.

At the close: December gold added 50 cents to $1,771.70; December silver dropped 13 cents to $34.58; October platinum gained $4.10 to $1,640.40; and December palladium picked up $5.70 to $673.05 an ounce.

The BoJ was not the only major central bank in the news today to decide on more monetary easing. The Bank of England also voted unanimously to maintain their bond-purchase program, despite acknowledging the risk of inflation. These decisions come after the Fed announced unlimited QE3, the ECB committed to buying the debt of insolvent eurozone nations that request bailouts, and China announced a new stimulus plan to build infrastructure. It seems the big five are in a race to the bottom in debasing their currencies, and the result will almost certainly be much higher inflation. To make matters worse, as Zero Hedge reports, Robobank just published a study concluding that global food prices are poised to rise by as much as 15% starting next year because of extreme droughts in the U.S., South America, and Russia.