The U.S. national debt clock at www.usdebtclock.org reads more than $30.73 trillion, which is clearly raising doubts about the ability of the Federal Treasury to service it in a more distant future without new and huge portions of the so-called "quantitative easing" in the form of coining more digital Dollars. Yet, the value of the global reserve currency continues to grow against a basket of the Euro, the British Pound, the Japanese Yen, the Australian Dollar and other Greenback's rivals, so that gold prices have to sink too.

The Federal Reserve (Fed) accomplishes now quite an opposite mission of monetary tightening to reduce the money supply in order to combat a hyper-high inflation. It is preparing to raise the U.S. Dollar interest rates above 3% soon in September, but the cost of servicing the national public debt is still below this 3% due to extensive safe haven purchases of assets.

The instinct of self-preservation, combined with investors' hunger for income above inflation puts money directly in the hugs of "his royal nibs" the Dollar. Yes, the problems of the American financial system are great, but they are delayed even amid energy crisis. New lows for GBP/USD around 1.17 against August 10 highs near 1.23 promise more substantial reward for short-sellers of the Cable too. Many other currencies are looking almost set for more failures, as other central banks are not so quick and brave as the Fed is in terms of the speed of interest rates hiking.

Another technical dive of the single European currency under the parity, when EUR/USD stopped at 0.9901 on August 23 added more financial institutions, businesses and private investors to the enormous list of the U.S. printing press customers. Many experts and some managers of large investment funds are now running their mouths discussing high chances for the Euro to lose at least 3-5% more, if not to drop well below the 0.90 round figure, bearing in mind such kind of historic lows for EUR/USD at the dawn of the launching era for the single currency.

The current nearly 5% discounting on gold prices, compared to the highs of about $1,825 per troy ounce on August 10, still does not provide sufficient activity in gold-related investments amid the prospects of greater potential profits from further positive moves of the U.S. Dollar exchange rate also combined with approximately 3% yield in U.S. Dollar-denominated ten-year public bonds or higher yields of some corporate bonds.

Esperio analysts believe that any new dips of gold futures, if it may drop again within the range of 3-5% lower, could turn the pyramid of market attention upside down from bonds and the Dollar in favour of gold, as soon as the discount in gold prices would be more aggressive. The long-term prospects of investments into gold generally becomes bright in the course of time against the cyclic inflationary spiral story.

by Alex Boltyan, Senior Analyst of Esperio company