El Salvador president proposes bill to overturn metals mining ban
In 2017, El Salvador became the first country in the world to ban forms of metals mining.
December gold futures traded at another record high hitting $1,664.50 in after hours trade on Tuesday on news that US consumers spent less in June, the first decline in more than two years.
On top of that personal incomes gained only slightly and most consumers were using that money to pay off debt. Some 70% of the US economy is reliant on consumer spending therefore any belt-tightening has ripple effects across the globe.
The Dow Jones blue-chip index ended down more than 2% or 266 points extending its losing streak into an eighth day – the worst performance since October 2008.
News of fresh central bank buying – South Korea added to its reserves for the first time since the 1998 Asian financial crisis — and the possibility of further financial stimulus to restart the US economy also persuaded investors to stock up on bullion, a storer of wealth and hedge against inflation. In Europe debt fears also triggered gold buying as yields on Italian and Spanish bonds hit their highest levels in 14 years.
Reuters quotes a hedge fund partner as saying: “The debt ceiling distraction may now be behind the markets, but the damage has been done.”
Gold for December delivery added over $40 to trade above $1,660 an ounce on the Comex division of the New York Mercantile Exchange. Silver rose 2.5% to $40.27 an ounce.
Bullion has rallied more than 15% year to date, and has gained more than 10% since the end of June when the Federal Reserve’s $600 billion bond-buying program ended. Talk of further stimulus, later downplayed by Fed chairman Ben Bernanke, lit a fire under gold at the time and with today’s dismal economic numbers, rumours of further quantative easing are bound to resurface.
MarketWatch spoke to one trader who said a weak jobs report Friday would likely send gold to an “assault” on the $1,700-an-ounce level.
Reuters reports gold has hit record highs in dollars, euros, sterling, South African rand and Canadian dollars, indicating investors’ distrust of volatile currencies.
Comments
TheEngineer
I heard that when you replace $20/hr factory jobs with $10/hr coffee shop and burger joint jobs, the worker buys less stuff.
Whodathunkit.