Gold prices are steady Thursday morning as the U.S. dollar index moves higher after hitting a four week high on Wednesday. Gold last reported a.m. is $1187.00 and silver is $16.68.
The Labor Department said first time weekly jobless claims rose by 7000 to a seasonally adjusted 282,000 during the week to Saturday. Jobless claims have reached a four week high.
Despite increasing prices, the National Association of Realtors said pending home sales hit a nine year high rising 3.4 percent in April.
Lawrence Yun, NAR chief economist, said that the steady gains in pending activity highlights the fact that buyer demand remains strong.
“Homeowners looking to sell this spring appear to be in the driver’s seat, as there are more buyers competing for a limited number of homes available for sale,” Yun said. “As a result, home prices are up and accelerating in many markets.”
In efforts to hedge itself from a shrinking U.S. economy, China is creating a $16 billion gold fund. Shanghai Securities Journal claim the fund will be used to fund mining projects, and in the creation of gold backed exchange traded funds. According to Market Watch, the “Silk Road Gold Fund,” will be led in part by the Shanghai Gold Exchange (SGE).
Along with the SGE, two of the country’s leading gold producers, Shandong Gold Group and Shaanxi Gold Group, have also bought a stake in the new fund of 35% and 25% respectively.
This new investment fund is part of the “Silk Road” initiative, to develop infrastructure across Asia and increase ties with neighboring countries. The plan includes building a network of railways, highways, oil pipelines and telecommunication lines.
After officially unveiling the new “Silk Road” project in March, President Xi Jinping said he hoped annual trade with the countries involved in the plan would surpass $2.5 trillion within a decade.
As China continues building man made islands in the South China Sea, while threatening Washington to “back off“, Washington is urging Southeast Asian nations to stand together against further construction on the disputed reefs. Beijing has added 1,500 acres to five outposts in the resource-rich Spratly islands since the start of this year.
A U.S. defense official said, “these countries need to own it” adding that it was counterproductive for the United States to take the lead in challenging China over the issue. More unified action by the partners, including the 10-member Association of Southeast Asian Nations (ASEAN), needs to happen quickly because “if you wait four years, it’s done.”
Though ASEAN members have voiced disdain over China’s island venture, the group has done nothing to prevent it. What exactly can these nations really do? When your military is comprised of old crop dusters, paddle wheel boats and untrained soldiers, China is hardly going to lend an ear of sympathy.
China is a bully who can easily overpower the ASEAN from a military standpoint and everyone knows it.
When we consider current events in Europe, the Middle East, Asia and the U.S., it seems precious metals is headed for good ground.
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