Gold Drops After Geithner Says Currencies `In Alignment,' Boosting Dollar
By Wendy Pugh
Gold declined after U.S. Treasury Secretary Timothy F. Geithner said that the major currencies are “roughly in alignment,” boosting the dollar and curbing demand for the precious metal as a haven.
Bullion for immediate delivery fell as much as 0.4 percent to $1,341.05 an ounce, before trading at $1,342.82 at 2:53 p.m. in Seoul. The metal gained for the past five weeks, touching a record $1,387.35 on Oct. 14, on speculation that the Federal Reserve may ease monetary policy further, hurting the dollar.
“After a period of weakness the dollar seems to be staging some sort of a minor recovery,” said Gavin Wendt, senior resource analyst at MineLife Pty in Sydney. Shifts in the U.S. currency are the “main driver of the gold price,” Wendt said.
The greenback rose as much as 0.6 percent against a basket of six currencies today. Geithner’s comments were reported in the Wall Street Journal, which cited an interview. Bullion tends to move inversely to the dollar.
“Geithner’s comments are giving a knee-jerk boost for the dollar,” said Takashi Kudo, general manager of market information service at NTT SmartTrade Inc., a unit of Nippon Telegraph & Telephone Corp. in Tokyo.
Group of 20 finance ministers and central bankers meet in South Korea on Oct. 22-23 for talks on how to keep the global recovery on track amid concern that countries may be vying with each other to weaken their currencies. Geithner said that he’ll use the meeting to help “rebalance” the world economy to be less reliant on U.S. consumers, according to the Journal’s report.
Tax Cheat Timmy Geithner has ZERO credibility. He opens his mouth and sh*t falls out. Currencies are in alignment? Because Timmy Geithner says so? I guess that means the Chinese Yuan is fine where it is then, eh Timmy? What a load of crap. The weak hands are still in Gold and getting flushed as I type...good riddance to you all! If you are looking for a reason to sell, you will always find one...Little Timmy Geithner running off at the mouth is hardly a reason to sell your Gold...and it is even less of a reason to buy US Dollars. Please note that the Japanese Yen REMAINS at a 15 year high, despite Timmy's babbling...this will all be over by the end of the G20 blame fest tonight and tomorrow.
And let's not forget the foreclosure fraud, even if the banks and the US government wish you would...
This note from Jim Sinclair says it all:
Dear Comrades In Golden Arms,
The weakness that the shorts on the Comex have taken advantage of is the many comments, almost every day, by highly placed people around the world stating that the Fed is making a huge error by utilizing QE.
The dollar today has not rallied enough to account for the gold price decline. The 30Year Treasury Bills indicate that economic news is not a factor.
What you need to focus on is the fact that the Federal Reserve has no other option but to go with QE to infinity.
QE never ended, it only became camouflaged through the methods it was utilized such as guaranteeing everything in sight.
What the market anticipates is more on the down low commentary by the Fed concerning QE. Remember that the Fed sees things within the US financial system that even other governments cannot such as the real risk of the rollover of securitized mortgage debt OTC derivative instruments.
You are witnessing the beginning of a period in the gold price that will be marked by totally outrageous volatility. I have told you many times I have no doubt whatsoever about gold trading at $1650.
Historically I have done well with price objectives on gold. I will do well this time around. If I had any concern it would be that I am much too conservative in my objectives.
Bert Seligman had a great lesson to teach when he said "The weak succumb, the strong survive."
From me personally to you, stand strong!
Gold is on sale... I fully expect the Asians and Indians to take full advantage of these sale prices tonight.
Fed's Bullard: Any easing may be in $100B steps- Reuters
Fannie and Freddie may need another $215B: FHFA- Reuters
The Dollar is strengthening? LOOOOOOOOOOOOOOOOOOOOOOOL