Today’s AM fix was USD 1591.75, EUR 1285.54 and
GBP 1024.29 per ounce.
Yesterday’s AM fix was USD 1617.00, EUR 1285.37 and GBP 1032.90 per
Gold fell by $18.40 in New York yesterday compared to
Tuesday’s close prior to Independence Day, and ended with a small loss
of 1.13% at $1,604.40/oz. Silver also dropped slightly, closing at $27.68/oz.
Silver is currently trading at $27.48/oz.
Gold did not manage to stay above $1,600/oz in Asian and European trading this morning, and is
currently trading at $1,595.90/oz. Gold is still up from a recent low of on
the 28th of June at $1,552/oz. Key US employment data is due to be released
WGC – The Impact of Inflation and Deflation on
the Case for Gold
Following yesterday’s WGC reports about the role of gold in investment
portfolios, this report looks at gold’s performance during inflationary
and deflationary times. Gold, non-perishable and limited in supply, is seen
as relatively immune to inflation, financial crises and credit default.
Topically, periods of negative real interest rates are thought to support the
demand for gold, because the opportunity cost of holding gold decreases when
real interest rates fall. Weak dollar has also been seen to drive up the
price of gold.
Real gold price
The report concludes that gold may perform especially
strongly when inflation is high, the dollar is weak, and there are elevated
levels of financial stress, highlighting the role of gold as risk insurance
in a balanced portfolio. There have been several recent inflationary periods
in the world, but periods of general deflation have been rare. Nonetheless,
the report suggests that in deflationary times, gold’s demand as a
store of value increases even when the demand for commodities that are
industrial demand-driven is likely to fall.
US dollar exchange rate and gold
The full report is available here.
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Gold struggles ahead of U.S. jobs report
Gold Futures Fall On Stimulus Outlook,
Dollar’s Rally – Bloomberg
Gold steady before US jobs data, 2nd wk of gains likely - Reuters