Gold is marginally higher again today in all currencies and heading for a higher weekly close of 1.4% in dollars. Gold eked out slight gains yesterday after the ECB and BOE kept rates at 300 year lows.
The U.S. Labor Department report today may show U.S. payrolls growth accelerated in January which could see gold come under pressure. However, should today’s jobs number mirror the poor ADP number earlier this week, then gold could surge higher in value.
ECB President Mario Draghi made more dovish statements, saying that the ECB “will maintain an accommodative stance of monetary policy for as long as necessary” which was gold supportive.
Draghi reiterated that the bank may take more accommodative action if money-market turbulence resumes.
Gold is 4.5% higher this year on haven demand due to concern that a slump in emerging markets would slow global economic growth affecting global financial markets. Almost $3 trillion has been erased from the value of equities worldwide so far this year.
Global markets are now dependent on the drug that is cheap money and any reduction in money printing and debt monetisation will likely lead to market turmoil and economic dislocations.
Silver posted the longest rally since August, extending a 2014 rebound of over 3% this year as turmoil in emerging markets and slowing economic growth reignited demand for haven assets.
Silver has rebounded 9.7% from a 34-month low on June 28 as physical demand increased. Sales of silver coins by the U.S. Mint almost quadrupled in January, while gold purchases surged 63%.
Gold traders, analysts are bullish on gold again for next week after global equities fell to nearly a 4 month low this week. The Bloomberg gold survey for next week showed that 17 were bullish, 14 were bearish and 2 were neutral.
Chinese store of wealth buyers return from a week long Lunar New Year holiday which should support physical demand. China became the world’s largest gold buyer last year.
Perhaps more than any other financial market, the gold market is subject to a huge amount of opinion, much of it emotional, subjective and not based on facts. The empirical evidence seen in research, both academic and other independent research, is often ignored. As is the historical record and the experience of people throughout the world in recent years and throughout history.