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90 seconds at 9 am with BNZ: Gold hits US$1,500/oz on inflation fears, US rating warning; Qantas hikes fuel surcharge; Fonterra auction flat

90 seconds at 9 am with BNZ: Gold hits US$1,500/oz on inflation fears, US rating warning; Qantas hikes fuel surcharge; Fonterra auction flat
20th Apr 11, 9:02am by Bernard Hickey

Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news that the gold price hit US$1,500 an ounce as inflation fears continue to bubble under financial markets and after news that Standard and Poor's had warned of a credit rating downgrade for America.

See more here at Bloomberg.

The US Treasury has forecast the US government may reach its US$14.3 trillion debt-ceiling limit as soon as mid-May and run out of options for avoiding default by early July. Most market observers, however, see a political agreement to lift the ceiling before then.

The fears about US Treasury debt even prompted America's biggest backers in Asia, Japan, to come out and voice support for US Treasuries.

Japanese Finance Minister Yoshihiko Noda said US Treasuries were basically attractive. See more here at Reuters.

Also, there is renewed talk the US Federal Reserve will continue printing money to buy US Treasury bonds after the expiry of its current money printing programme due to end on June 30.

Bloomberg reported speculation that the US Federal Reserve could use the proceeds from maturing mortgage debt to buy up to US$17 billion a month in US Treasuries.

See more here at Bloomberg.

Meanwhile, Qantas announced its 5th increase in its fuel surcharge this year. The surcharge is set to rise to A$580/ticket in some long-haul cases. See more here at SMH.com.au.

In New Zealand, Fonterra's overnight auction of milk powder was flat. See our earlier article here.

Also, see Kymberley Martin's currency report here from BNZ

No chart with that title exists.

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18 Comments

by  Matt S  |  20th Apr 11, 9:08am 1303247294

$1500 and $44 yeah baby.. I for one am celebrating as are a number of other smart investors around here .. property investment truely is for smucks !

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by  We Are Stuffed  |  20th Apr 11, 11:16am 1303255017

I wish I had bought more silver.  It has been an outstanding run.

Bloody heavy stuff in the form of Reserve bank of NZ .925 dollar coins though. The gold fits in my hand but the silver takes up a couple of strong suitcases.

I hate seeing it go up.  The higher it goes the more in the cwrap we are...

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by  Muppet King  |  20th Apr 11, 9:32am 1303248737

$44 silver, far out, I reckon its going to get bigger than $50

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by  Matt S  |  20th Apr 11, 9:42am 1303249361

Agreed.  Once $45 is passed (next phyc level), $50 will come in very short order.  Of course, passing $50 opens up the possibility to run to $100 which will also come ...

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by  JimboJones  |  20th Apr 11, 9:56am 1303250175

MAAAAAATE!!  You can't lose with gold!! Gold is different. Its not a bubble when its gold. MAAAAAATE!!

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by  Matt S  |  20th Apr 11, 11:26am 1303255568

Your absolutely right, and one day you can trot that little jem of a line out and your timing will be spot on.

“Maybe it will reach $1,100 or so but $1,500 or $2,000 is nonsense,” Roubini said. Gold rose to a record $1,098.50 today in New York on speculation that central banks and investors will purchase the metal to hedge against a declining dollar. Bloomberg

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by  Vera Fayed  |  20th Apr 11, 9:41am 1303249264

Yeah, but....all that polishing.

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by  Vera Fayed  |  20th Apr 11, 5:47pm 1303278474

Last warning MK. Call me a curry-munching PI crack ho if you want. But one more inference that I'm a REA and it's handbags at 20 paces.

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by  Kunst  |  20th Apr 11, 10:54am 1303253677

 Gold is gold..

 ...but it seems not for our authorities – I find this unbelievable - but obviously fits the profil -keep sleeping !

(4) gold (including gold deposits and, if appropriate, gold swapped) volume in fine troy ounces –null – zero – zip – 0.

Here the link:

http://www.rbnz.govt.nz/statistics/extfin/sdds/sddssep09/data.html

 New Zealand– not on the list

http://en.wikipedia.org/wiki/Gold_reserve

 End of May US$ 2’000.- p/oz Gold US$ 50.- Silver –  more possible then not.

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by  Elliot Wave  |  20th Apr 11, 2:55pm 1303268134

Bob Prechter alerted 4 weeks ago to be ready for Trend Reversals in:

 

The US dollar - everyone is bearish.

Interest rates - everyone thinks they're going to rise.

The stock market - everyone is bullish.

Inflation expectations - everyone thinks it is going to go higher.

Economy - everyone is confident in 2011.

Oil - everyone thinks it is heading higher.

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by  steven  |  20th Apr 11, 3:21pm 1303269699

If these are mutually linked?  no

USD, will weaken.....

Interest rates.....cant go any lower than just about 0....

Stock market, dead cat bounce...dropping like a stone probable.

Inflation...way lower, just sitting here waiting for deflation.

Economy - everyone confident? I see a few, most seem to vary from concerned to worried or petrified....

Oil - higher until the global economy collapses....then $35 is possible....followed by anarchy in the middle east...

Mainly becasue the hawks have now clearly got the upper hand in the fiscal arena with a core inflation / gdp growth of around 1%.....and they with the their austerity packages are going to stall the economy....

regards

 

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by  scarfie  |  20th Apr 11, 6:44pm 1303281857

Steven some of the guys I have been following have been picking a major reversal all year, and technically it has started. Time will tell if we see follow through.

Stocks and USD are inversely related, with a flight from stocks to safety seeing the USD rise.

SPX500 has put in a weekly reversal signal, and the NZD on a daily chart. If the NZD sees the week out below .7827 it will confirm the reversal on the weekly chart. Oil has also put in a reversal signal as perhaps gold.

All dependent on the PIGS troubles really. The worse they get the more likely a follow through on a reversal.

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by  steven  |  20th Apr 11, 8:21pm 1303287692

I dont disagree with a major reversal......My differences are I can see I think how they are thinking and its simply just business as usual....oil is just another stock etc....hence why I differ on individual points because I think its more than that and yes I expect this dead cat bounce to reverse....and severely....

Somethings like stocks and USD are "normally" opposites, but did this happen in the GD? I thought they both dropped but I could be wrong....

PIIGS well it seems to jump from one potential collapse point to another....right now finland looks to be worth watching.....I cant see how Greece can just keep borrowing and borrowing, eventually the bucket is empty....and the ECB wants to raise the OCR....

Oil will drop as ppl think the demand will drop due to a recession coming, (also the baltic dry index is just ikky)  despite that oil is going to come back...unless we see a depression as bad as I think.........well frankly I really dont know........we are in un-charted territory, we exceed the DG in just about every bad index/behaviour/pattern/number you care to look at....

regards

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by  steven  |  20th Apr 11, 3:25pm 1303269916

yep...deflation.....the fiscal hawks have won....and stopping govn spendign is like turning off the breathing apparatus on an intensive care patient too early....really really bad.

Though the low OCR isnt aimed so much at households directly i think...

NZD I dont think they are trying to keep it high, its just where it is....

UD=USD?  I cant see how myself, but its a crazy world.

regards

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by  Gertraud T.  |  20th Apr 11, 5:46pm 1303278361

What you and several other bloggers miss (deflation-inflation) is that the worst fears will come true, as a matter of fact we are already in STAGFLATION, meaning much higher prices and a stagnating economy.

Have been there......

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by  steven  |  20th Apr 11, 6:35pm 1303281329

So 15% inflation in terms of CPI, say core at half that 8% and houses have lost 7%?

So minimum losses in 4 years 15%....

Great investment that.

 

 

 

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by  foxysfolkfaced  |  21st Apr 11, 9:11am 1303333919

if we are heading for deflation will the US govt not try to avoid this by starting QE3 - and if they do is this delaying the inevitable? just asking the question....

with all that debt floating around in the US (& everywhere else) they will try everything to avoid deflation but I just don't know if they can stop it.

so hard to know what to do personally - deflation? stagflation? high inflation? hyperinflation? peak oil? gonorrhoea outbreak? which one will it be, what do we do?

aaaarrrrhhhhhhggggg

is it time to hide our money under the matress yet? stock up on canned foods?

fff

 

 

 

 

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