Last Friday’s weak US employment data pushed gold prices up, with the most actively traded Comex gold contract – for August delivery – settling up $9.70 (0.6%), at $1,542.40 per troy ounce. Though platinum and palladium futures also settled up for the day, silver was hurt by the weakening economic sentiment, with the silver Comex contract for July delivery closing down 1.1 cents at $36.191 per ounce. Meanwhile, gold priced in British pounds reached a new record price last Friday of £945 per ounce, as investors grow increasingly wary of the fragile state of the UK economy and rising inflation there. Britain’s coalition government is coming under increasing pressure to soften its approach to cutting the country’s budget deficit, though given the modest nature of the cuts so far attempted (UK government borrowing hit a new monthly record of £10 billion in April) it’s not clear that an even looser, more relaxed approach to deficit reduction from the government will necessarily result in GDP growth – especially if economic conditions in the rest of Europe, America and East Asia continue to deteriorate. The old cliche “if America sneezes, the world catches a cold” remains apt, and the US economy is in a depression rather than a recession. The fall in US house prices over the last four years has beaten the slide in valuations that occurred during the 1930s Great Depression, and the unemployment situation there remains dire – despite government statistical adjustments that might tempt some to think otherwise. In the words of economist John Williams of shadowstats.com: “actual (US) business activity continues to suffer severely, and much-more-extreme reporting ‘catch up’ looms in the month and months ahead. There simply is and has been no underlying fundamental circumstance at hand that could sustain positive growth in the broad US economy... with consumer income not growing faster than inflation and with debt-expansion potential still severely restricted, broad economic activity has no basis for entering a period of sustained growth. At best, various short-lived stimulus gimmicks may have short-lived impact.” With US consumer demand important to so many countries (not least the UK), this can’t help but have an effect on economies all over the world. America is losing its dominant position in the world – economically as well as geopolitically. But as the sub-prime mortgage crisis of 2008 showed, bad events in America still have a nasty habit of wrecking havoc elsewhere. Source: Gold Money Original Article: http://www.goldmoney.com/gold-research/record-sterling-gold-price-as-uk-economy-weakens.html?page=2488&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+GoldMoneyGoldResearch+%28GoldMoney+-+Gold+Research%29

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