Gold edged down on a Monday as speculators took their profits as prices rallied on thin volumes on Friday to their highest in a month on technical buying. A strong fall in the greenback triggered rapid gains in commodities and options-related buying on Friday.
Turkish exports of gold, precious metals, pearls and coins to Iran rose to $1.2 billion in April from a tiny $7,500 a year earlier, according to figures released by the state statistics institute in Ankara yesterday.
Due to sanctions placed on Iran by the United States and the European Union, Iran is relying more on gold for international trade. Furthermore, Iran recently used to gold in order to import food, since other financial assets were frozen.
More money means more inflation. Meaning that injections of money are sure to raise the cost of living. They're also sure to depress the currency's exchange rate, especially if the injection goes unsterilized.
China's growing importance to the future of precious metals and particularly gold was seen as an influential newspaper affiliated with the Ministry of Commerce said China should buy gold to diversify foreign-exchange reserves.
Gold is little changed in London trading this morning with slight losses in dollar and euro terms. Expectations of QE2 are leading to further dollar weakness and continuing strength in commodities and precious metals.