Gold edged up on Thursday, as bargain hunters showed buying interest and gold was particularly strong in euro terms after data from Europe confirmed the continent remains very vulnerable to economic shocks.
The dollar gold price drifted back below $1,650 an ounce Wednesday morning, 1.1% down on the week so far, although it jumped higher in Sterling following after a Bank of England report said policymakers are prepared to "look through" persistently high U.K. inflation.
At some point central banks will probably give up on QE, reasoning that the balance of risks outweighs positive outcomes. Until policy makers come to that conclusion, there's still a bullish case to be made for gold.
Gold no longer has a legal role in the world’s monetary system, but because of a collapse of faith in sovereign obligations and a coming complete lack of trust in governments and financial institutions, gold is going to quickly become a core banking asset.
Gold prices added over 1% ahead of the ECB rate-setting meeting this morning as the post US jobs data-sparked Friday rally continued to unfold. The gold market’s net speculative length is at or very near multi-year lows.
What do you get when you mix negative real interest rates with stimulative money supply efforts by global central banks? An exceptionally potent formula for higher gold prices that could send gold to the unimaginable level of $10,000 an ounce.
The new trading week got off to a fairly rocky start in the precious metals' complex this morning as slumping equity markets and a stronger US dollar sapped more value and bullish enthusiasm from the sector.
Volatility continued in unabated fashion in the precious metals markets overnight as gold and silver each gave up more than 2% in value on the heels of a firming US dollar. Thursday's gains in gold largely evaporated.