Masaaki Shirakawa chaired his last monetary policy meeting this week as governor of the Bank of Japan (BoJ); but even before his departure, tolerance of a strong JPY was already killed off by the new government. What follows now could be the next big leg down in the JPY exchange rate.
The Gold Investor Index, which tracks buying and selling on the world's largest physical gold market for private investors online, fell to 54.9 in January, down from a 12-month high of 58.3 a month earlier and its lowest reading since September.
Gold prices hovered just below $1,738 an ounce Monday morning in London, close to three-week highs, while stocks and commodities were broadly flat and the euro traded near two-month lows against the dollar.
After Monday's Asian session saw new six-week lows, the dollar gold price recovered some ground to trade near $1,725 an ounce Monday morning in London, while stocks and commodities were broadly flat and US Treasury bonds fell.
The spot gold price fell to $1,772 an ounce Wednesday morning in London, a few hours after hitting its highest level for nearly seven months after the Bank of Japan became the latest central bank to announce further quantitative easing measures.
The wholesale gold price reached new six-month highs in Asian and London trade Thursday morning at $1,713 per ounce, rising alongside most other financial assets as traders awaited the European Central Bank's latest policy decision.
Exploding the money supply can't be guaranteed to destroy the value of cash, as Japan's experience over the last decade shows. But crushing the purchasing power of people's income and savings is a more certain power for central bankers to summon up than anything else.
Last week’s wide price swings continued to befuddle and frustrate speculators in the commodities’ space and for a fourth consecutive week the results revealed that hedge fund players placed their bets incorrectly in these markets.