S&P Dithers While Dagong Global Cuts US Credit Rating, Again

While two of the US’ most important credit rating agencies — Moody’s and Fitch — have maintained the US’ triple-A rating, Standard & Poor’s has yet to announce where it stands. That’s after already stating a 50 percent likelihood of downgrade if Congress failed to cut spending by at least $4 trillion over 10 years.

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The 2011 Gold Season is Just Around the Corner

The ongoing debate in Washington prompted increased Fear Trade activity in gold this week. The issue over raising the federal borrowing limit caused the yellow metal to remain around its all-time high of $1,600 per ounce this week.

Gold has now increased for 124 months straight, says Deutsche Bank. The rally is in its 11th year, lasting nearly three times as long as other historical rallies going back to 1971. If the metal rose to $2,100 an ounce, it would represent the most powerful percentage increase in history, according to Deutsche Bank.

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Rating Agencies Capitalized on the Debt Ceiling Fiasco

Now, as anticipated, a debt ceiling agreement has been reached and the wait is on to see whether the major rating agencies — Standard & Poor’s, Moody’s Investors Service, and Fitch Ratings — will reaffirm or downgrade the US’ triple-A status.

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China to Overtake India as World’s Biggest Gold Consuming Nation

Much like how China has surpassed the US in so many manufacturing and economic milestones — and South Africa in gold production — the world’s most populous country is now poised to topple India as nation with the strongest gold demand in the world.

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2011 Halftime Report: The Cues for Copper

Copper slightly disappointed investors, ending the first half of the year with a decline of 3.50 percent. Worries about global inflation and, more specifically, the potential slowing of China’s economy weighed on copper’s price. The red metal rose 5 percent quickly in the new year, but similar to zinc, lead, palladium and platinum prices, declined sharply at the beginning of May.

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2011 Halftime Report: Oil Outlook Remains Strong

This year has been eventful for the oil patch. Natural disasters, revolutions, terrorist attacks and political maneuvering kept oil bouncing around $100 per barrel and 3.8 percent higher on the year at the end of June. Despite the volatility and large number of external forces affecting oil prices, the International Energy Agency (IEA) said in its most recent Oil Market Report that “the bull run evident since autumn 2010 therefore looks in large part to be justified by supply and demand fundamentals.”

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Ray Dalio: A Deleveraging Period for Ten Years or More

Ray Dalio is founder of what the New Yorker refers to as the world’s largest hedge fund, Bridgewater Associates. The 61-year-old Dalio, with a personal net worth estimated at about six billion dollars, is known for his ability to anticipate and adapt to troubling macroeconomic conditions while consistently outperforming other funds.

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The Ten Trillion Dollar Milestone

A milestone on the road to economic ruin was reached last week. Total Foreign Exchange Reserves topped $10 trillion. That means central banks have created the equivalent of $10 trillion of fiat money that they have used to buy the currencies of other countries.

That figure does not include the money central banks have created and used to buy assets denominated in their own currencies, such as the $2 trillion the Fed created during the first two rounds of Quantitative Easing.

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How QE3 Could Bring About $5,000 Gold and $1,000 Silver

In his recent commentary, Ambrose Evans-Pritchard sees the world nearing a revived gold standard as the US, Europe, and Japan all continue testing the limits of maximum sovereign debt levels.

With potential for QE3 — a third round of the Federal Reserve’s quantitative easing program — on the horizon, governments around the world must consider alternatives to the US dollar and other paper money. These developments are likely to continue impacting precious metal prices.

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