Gold prices stabilized on Wednesday as the global markets considered the long term implications of the ongoing crisis in Japan. Analysts from Vision Financial Markets, Standard Bank Plc, and Barclays Capital described yesterday’s pullback in gold (alongside other markets) as a short term over-reaction to a crisis that seemed to bring worsening news by the hour.

The recent spike in food and oil prices has made the threat of inflation more acute globally, but monetary policy is still widely varied from country to country. A top European central banker said rising energy costs were posing a threat to both emerging and advanced economies. But a U.S. Federal Reserve official said more stimulus may be needed to keep lofty oil prices from dragging down the U.S. economy.

February 2011 has been a month to remember for precious metals owners. Rising inflation and turmoil in North Africa and the Middle East has reverberated in news headlines around the globe, boosting demand for alternative assets. In fact, February is closing out with the largest monthly increase for gold prices since April 2010. Silver prices are hovering at a near-31-year high.

President Obama released his $3.7 trillion budget proposal this week for fiscal year 2012, with a plan that shows a clear shift in focus from economic stimulus to deficit reduction. However, even with painful cuts in discretionary spending and possible tax increases, continuing deficits are projected through at least 2021. This would add a staggering $7.2 trillion to the federal debt by that time.

China’s insatiable desire for gold is continuing, both on a government level and among individual citizens.

China’s national news agency reported Sunday that China’s gold output in 2010 was 340.88 tons, yet the country still had to import 209 tons in the first nine months of the year to meet its own internal demand.

The future of the dollar as a reserve currency has been in question recently as comments by policy makers globally have turned decidedly gloomy about the dollar’s prospects.
Foremost in the minds of analysts and government finance officials is the U.S.’s continuing policy of quantitative easing, which is flooding the market with more dollars, as well as the sizable (and swiftly growing) debt load of the U.S. government.

While budget deficits are nothing new for the U.S., the size of this year’s deficit looks to hit a new record, according to the Congressional Budget Office (CBO), a nonpartisan budget agency.

By Goldline International Famed economist John Kenneth Galbraith once said “Nothing is so admirable in politics as a short memory.” However, in markets, having a short term perspective is not so desirable. The recent pull back in gold prices from their all time high in early December has unleashed a floodgate of articles calling it [...]

Gold prices have staged a turnaround this week amid fresh weakness in the dollar and burgeoning demand from Asia.

The consensus seems to be in gold’s favor for 2011. The London Bullion Market Association (LBMA) just released a survey of 24 precious metals analysts that summarizes their expectations for gold in 2011, and the results are encouraging.