Gold prices are down Wednesday as the U.S. dollar index hits another 12 year high overnight and the Euro sinks to a 12 year low. Fiat currency versus fiat currency, the U.S. dollar is still best of the worst. That being said not one of them is worth the cotton and ink it takes to produce them. Gold last reported p.m. is $1150.70 down $11.10 and silver is $15.38 down 31 cents.
Greek Prime Minister Tsipras is not making friends with Germany or the EU as he decries war crimes committed by Germany against Greece during the second world war. Greek Justice Minister Nikos Paraskevopoulos say’s he’s ready to sign an older court ruling that will enable the foreclosure of German assets in Greece in order to compensate the relatives of victims of Nazi war crimes. In 2000, Greece’s Supreme Court ruled in favor of Distomo survivors but the decision was not enforced. 218 Greek’s lost their lives in the village of Distomo during a Nazi massacre in 1944.
The decision comes on the heels of longtime animosity between the two nations and trading insults is increasingly becoming rule of the day. Germany is rejecting calls for reparations claiming war compensations to individuals were settled with the Agreements of 1960 and 1990. The Agreements however did not account for destruction and theft brought on Greece during 4 years of German occupation. According to some sources, Greece claims Germany owes it somewhere between 269 and 332 billion in reparations equating to 82 percent of Greek gross domestic product. Good luck Greece but that’s not going to happen.
After Obama issued an executive order labeling Venezuela a national security threat and ordering sanctions against some top officials, Maduro has come out swinging. In his latest statement he announced a new law giving him special powers to preserve the peace, integrity and sovereignty of the country against the “imperialist aggression” of Washington. The U.S. “president of peace” sure knows how to make friends. Clearly there’s not much Maduro can do but his rhetoric sounds good to his constituents.
A worsening economy brought on by falling oil prices has spurred Maduro to consider liquidating some of the countries gold holdings. Venezuela’s central bank is in talks with Wall Street banks to create a gold swap that would enable it to monetize around 1.5 billion of the yellow metal held as international reserves. The central bank would provide 1.4 million ounces of gold in exchange for cash. After 4 years, Venezuela would have the right to buy the gold back, wink, wink. The country is cash strapped following the maturity of a 1 billion euro bond this month and coupon payments of around $700 million in April. Ironically Venezuela is going to the wolves of Wall Street expecting fair treatment on the mentioned trade. JP Morgan will be more than happy to “heist”, the gold in exchange for fiat currency.
We can expect the U.S. dollar to strengthen for the time being as the EU fiasco worsens. This will create downward pressure on gold and silver even at a time when both metals are in high demand and short supply, especially silver.
We continue advising clients interested in purchasing precious metals to consider silver due primarily to continued and growing industrial demand.
We are offering special pricing on 1 ounce silver bars while supplies last.
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