Gold Grows More Scarce While Fiscal Cliff Put On Post-Election Hold
July 18, 2012
By James O'Dell
July 18, 2012, Los Angeles – The price of Gold eased 0.36 percent or $5.70 to close at $1,582.00 an ounce on Tuesday, after Fed Chairman Bernanke disappointed investors when he gave no hint of further monetary stimulus to help breathe life into the sputtering economy. The price of Silver rose 0.11 percent or $0.03 to close at $27.27 an ounce, while the Gold/Silver ratio fell to 58.01, as Silver outperformed Gold.
One look at technical charts and you would see that Gold is currently trading in the end stages of a triangle consolidation pattern, with Gold bugs hoping for a move above $1,610.00 an ounce to set the market up for a breakout to the upside. “Generally when you break out on one side or the other, you see quite a large move,” said Spencer Patton, of Steel Vine Investments.
A new report by Canada-based Metals Economics Group, says that Gold’s scarcity has increased as new discoveries over the past 15 years have failed to keep pace with the extraction volume for the same time period. The report suggests the scarcity of physical Gold will only get worse in the coming decades.
"Despite the apparent shortfall in new discoveries, the biggest reserves replacement challenge faced by the major producers and the industry as a whole is not that there is no Gold left, but that all the 'easy' Gold has been found," said Metals Economics Group. To reach the estimated 289.8 million ounces of on-the-ground Gold reserves of the world's 26 largest miners, will take longer and cost more to extract than at any other time in the past.
Meanwhile, if Congress fails to resolve the looming budget crisis, automatic cuts in federal spending due to take effect at the start of 2013, will cost the economy more than 2 million jobs according to a report released on Tuesday. The automatic cuts are the result of the failure last year of a bipartisan congressional panel to enact a plan to trim the budget deficit by $1.2 trillion over a decade.
Lawmaker’s decisions on reductions, expiring Bush-era tax cuts and another effort to lift the debt ceiling are part of a post-election congressional agenda that won't even begin to deal with the coming "fiscal cliff" until late November. Don't leave your assets unprotected during these times of economic and geopolitical uncertainty, invest in physical Gold and Silver bullion and protect your wealth.
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