Gold Hits Three Month High Against Weak Dollar

Weak economic data coming from the US has softened the value of the dollar. Subsequently, traders are investing in the safe haven of gold. Prices were up by $8.60, mainly due to China continuing its hoarding of precious metals.

China seem intent in accruing their gold reserves until they have an equal amount of precious metal deposits as the US – the strongest economy in the world, for the time being at least.

The US senate has run up almost 18 trillion dollars in debt and the rate is accruing $10m dollars a day. The senate famously went on strike for three days in 2013 until an agreement was reached to manage the burden of the debt.

US debt ceiling

The problem of the debt ceiling was resolved with an agreement that the spending limits would be raised – allowing the senate to continue spending frivolously. The US is free to continuing the issue of as much debt as it needs until March 2015 without conditions.

IN what is a remarkable decision to manage debt by creating more debt it seems the US senate are driving the US economy to collapse –and subsequently the world economy.

The US dollar is used as a benchmark for the global stocks marks and 80% of dollars issued are used outside the States. The decision to make more debt rather than deal with the current burden will put stress on the debt market until the ceiling comes crashing down.

Traders backing gold

When currency is weak, gold is strong. Imagine what will happen when the US economy collapses and the dollar is worth practically nothing – gold value will sky-rocket!

Analysts had predicted gold prices to fall in 2014 on the back of some strong economic data coming from the US in the third quarter of 2013. Chances are that gold prices will fall before the end of the year, but until the US economy shows signs of improvement traders are sticking with the safe-haven of gold and prices will climb steadily.

Last week the Federal Reserve announced its intention to continue scaling back its bond buying process. Market sentiment had expected to favour equities, but traders clearly do not trust the US Central Bank policy makes anymore and are sticking with precious metals to hedge against riskier investments.

Buy gold

The US debt ceiling cannot hold forever and when it crashes, the global crises will tsunami to more devastating effect than the 2008 banking crises. Six years later the US economy is still feeling the effects and is still struggling to recover. The stronger economies in Europe however are showing positive signs.

It is not a question of whether the economy will collapse again, but when. The best protection against a massive global recession is precious metals, so to protect your financial future buy gold today by visiting to check out the latest deals.