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Later this week the Group of 20 nations meets in Moscow. A main topic will be currency values as many industrialized nations have in recent months, or longer, worked to devalue their currencies to revive their economic growth. There is growing concern that “currency wars” could break out if there is not some form of agreement reached soon by the major nations. At present, Japan is seen as the major instigator as the yen continues to plummet in value. Reports during the weekend said the U.S. and European Union finance officials are considering issuing a joint statement on the matter, designed to ease growing worries and to send a warning to other countries. If the major countries cannot come to meaningful agreement on the matter and continue to work to devalue their currencies, that could become a major bullish force for the gold market, which is viewed by many traders and investors worldwide as a safe-haven “hard currency.”

In other news, the OECD said in a report Monday that the European Union debt crisis is stabilizing amid Euro zone economic improvement. The group also said there will be economic growth divergence in the near future, with the U.S., U.K., Japan and Brazil showing economic growth, while China, Canada, France and India are set for economic weakness in the coming months.

The U.S. dollar index is firmer early Monday but did hit a fresh four-week high overnight. The greenback bulls have gained some fresh upside near-term technical momentum recently, but the bears still have the overall near-term technical advantage.

Re: “currency wars,” it seems all nations are feeling themselves gauged by some/all the devaluations of the others. Frankly, I can’t see a lasting “form of agreement” coming out of this month’s Group of 20 meeting.
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