As the Dirty Fed Dollars Pour In, Europe Hides in Gold
Ever feel like you've been here before? Like, you know, last year?
Alarmed at the plunging value of their currency, Europeans are leading an exodus out of the euro and into gold.
The burgeoning demand pushed gold for delivery this month up 1.6% on Tuesday to settle at an exchange-record $1,219.90 on the Comex division of the New York Mercantile Exchange. The gains continued in electronic trading after the close, where gold reached $1,233.50 an ounce.
The euro has slumped 13% against the dollar in the past six months and five percentage points of that has come since the beginning of May. The sharp decline has pushed investors around the globe into safe havens—from the U.S. dollar to Treasurys—but among the most popular is gold.
Anecdotal evidence shows Europeans are leading the charge.
Hey, WSJ, let's sharpen up the reporting a bit: Europeans piling head first into gold ETFs isn't necessarily the same thing as fleeing to the safety of gold, though it beats the living hell out of lingering in euro-denominated assets or, you know, bonds LOL!
Anyway, it's a fucking stampede:
ETF Securities, a London-based fund manager, had an inflow of $490 million into its gold-backed funds in the past two weeks. All of that came from European investors, said Nick Brooks, the firm's head of research and investment strategy.
The flight to gold "is not a short-term trend," Mr. Brooks said. "Sovereign debt problems are going to be with us for a longer term."
MarketWatch can't believe the gold bugs aren't freaking out but I'm pretty sure that's because we're tired of yelling and are too busy dumping bonds to make much of a stink.