Rising prices in the summer of 2011 will continue due to fears of sovereign debt in the United States and the eurozone. Such a sharp rise in the price of gold in the summer is the first time in 29 years, and this has surprised many, with the exception of a few experts. Gold and other precious metals are receiving increasing attention from the major financial market media, who are finally beginning to understand that precious metals can help protect an investment portfolio both during a debt deflationary collapse and when inflation rises, not to mention a collapse of a coin.
It has to be repeated: the physical possession of precious metals is not tied to anyone’s obligation or guarantees. Precious metals are not subject to delinquency and risk on the opposite side, which cannot be said about other financial assets and equivalents in gold and silver paper.
Eric Sprott and Andrew Morris warned short speculators that an oversupply of silver paper could lead to a price increase due to high demand for silver paper, but at the same time there is not enough silver in warehouses. Silver inventories are historically at low levels. After the price of silver fell in May 2011, a lot of physical silver was bought and traders were unexpectedly surprised that the price of silver was able to get out of the $ 33-36 range and again exceed $ 40 an ounce. But what will be the trigger for further growth?
The eurozone and the United States are trying to maintain their honor. Obama added fuel to the fire by setting a deadline of July 22, 2011 to resolve the country s public debt problem to prevent default on August 2, 2011. Fitch rating agency joined S&P and Moody s on the issue of the degradation of the US credit rating if the country s national debt ceiling does not exist increased in time. The downgrade of the US credit rating will shake the entire $ 100 trillion bond market to its fundamentals. Regardless of what happens this summer or in the near future, U.S. debt is growing exponentially. Especially with rising interest rates and bond yields, as in Europe, risk spreads hit new highs this week. This week’s EU summit against the crisis could also catch fire if the final decision on economic aid to Greece is not made or if the so-called “private investors” are solving this problem. The European version of the quantitative stimulus will help save time on the debt front, but not without hurting the euro.