Surging Oil And Deepening Inflation - Gold & Silver Rise To Record Nominal Highs At $1,459 And $39.50

by Tyler Durden


In trading in London this morning, gold reached a new record nominal high ($1,459.07) and silver a new 31 year nominal high ($39.50) as investors bought the precious metals to hedge deepening sovereign debt risk (in the EU but also in the US with the threat of a federal budget shutdown), geopolitical risk and deepening inflation.

Brent crude reached $123.00 a barrel this morning

Gold and silver’s record highs were barely reported in the non financial press and the majority of the investing public will not be aware of the record nominal highs. This is a continuing indication which suggests that the precious metals are far from the mania bubble phase.

Inflation has taken hold in much of the developing world and is taking hold in developed world markets now. Despite very significant price increases in vital commodities, particularly the essentials of food and energy, there remains much denial about the threat of inflation and indeed the threat of stagflation.

Energy prices have surged so far in 2011 with Brent crude up 28.6%, NYMEX crude up 16%, gasoline up 26% and heating oil up 25%. Agricultural commodities have also seen sharp rises. Corn is up 20% to a new record nominal high and cotton has surged 50%. These gains have been seen in just over 3 months.

Immediate-delivery bullion increased 0.2 percent to an all- time high of $1,459.07 an ounce

Spot silver rose to $39.41 an ounce, its highest level since early 1980, extending Tuesday's gains.

"Silver will go up to $40 and it could rise to $100 in the next few years."

Demand for precious metals strengthened as investors sought a shelter to protect their wealth against the conflict in Libya and the nuclear crisis in Japan.


http://www.zerohedge.com/article/surging-oil-and-deepening-inflation-gold-silver-rise-record-nominal-highs-1459-and-3950