GOP boosts gold ahead of convention

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Betsi Fores The Daily Caller News Foundation
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As Republicans debate returning to the gold standard, traders are more bullish about gold than at anytime in the last nine months.

“There’s no doubt about it, this is gold’s moment,” Charles Morris of HSBC Global Asset Management in London told Bloomberg. “All the long-term trend signals suggest that gold is in a very strong bull market.”

According to Bloomberg News, “Twenty-nine of 35 analysts surveyed by Bloomberg expect prices to rise next week.”

Republicans will adopt their party platform this coming week at their national convention in Tampa. Proposals to audit the Federal Reserve and create a commission to study the gold standard are likely to be included as planks.

Tennessee Republican Rep. Marsha Blackburn told the Financial Times that the adoption of these measures is not simply to appease Ron Paul and the swath of delegates he picked up during the primaries.

“These were adopted because they are things that Republicans agree on,” Blackburn, the co-chair of the platform committee, said. “The House recently passed a bill on this, and this is something that we think needs to be done.”

“The move shows how five years of easy monetary policy — and the efforts of congressman Ron Paul — have made the once-fringe idea of returning to gold-as-money a legitimate part of Republican debate,” FT notes.

Slowing Chinese manufacturing, six quarters of slow American growth and the continued Europeans debt crisis have many policymakers favoring more stimulus. As the Federal Reserve continues to buy U.S. debt, the price of gold has risen.

“Gold rose 70 percent as the Fed bought $2.3 trillion of debt in two rounds of quantitative easing from December 2008 through June 2011,” Bloomberg reports, and is up 500 percent over the last decade. Discussion of a third round of quantitative easing may only perpetuate the rise in gold prices.

Republicans jumping on the gold standard would need to take into account a handful of things. The commission would only be able to make recommendations to policymakers.

“Any commission on a return to the gold standard,” FT concludes, “would have to address a host of theoretical, empirical and practical issues.”

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