Wall Street racked up its biggest one-day gain in four years on Wednesday as fears about China's economy gave way to bargain hunters emboldened by expectations the U.S. Federal Reserve might not raise interest rates next month.
U.S. industrial production unexpectedly fell in May as manufacturing and mining activity remained weak, a sign that a strong dollar and spending cuts in the energy sector continued to constrain economic growth.
Looking at the huge divergence between the continued growth in the U.S. national debt and the drop and subsequent tight trading range for gold between $1,200 and $1,400, one can only conclude that gold is somehow being prevented from its previous job of accurately reflecting an explosive U.S. national debt picture.
Wholesale quotes for gold bounced from one-week lows beneath $1,270 per ounce Tuesday morning in London, turning higher as Asian and European stock markets failed to extend Monday's rise to new all-time highs in U.S. equities.
Citi is looking for gold to average $1,255/oz in 2014. The bank believes Chinese physical demand will ‘represent a key source of price support for the gold market…and we believe renewed positive buying momentum in China will prevent a wholesale rout of gold prices.’
The financial crisis of 2007-2008 has sparked the most intense interest in international monetary reform since Richard Nixon closed the gold window at the New York Fed and devalued the U.S. dollar in 1971.