Another consequence of the pigeon's tone Bernanke yesterday was updated highs for gold, which touched 1,533 in late Asian session. Like most raw materials priced in dollars, its fate depends on the dollar. And at least for now, gold is minimally changed during the year, as measured in other currencies, strengthened to USD, and the euro - weakened by 2,5%. To sterling and the Aussie, it has grown less than a percent.Another consequence of the pigeon's tone Bernanke yesterday was updated highs for gold, which touched 1,533 in late Asian session. Like most raw materials priced in dollars, its fate depends on the dollar. And at least for now, gold is minimally changed during the year, as measured in other currencies, strengthened to USD, and the euro - weakened by 2,5%. To sterling and the Aussie, it has grown less than a percent.
But besides the direct assessment of raw materials for the currency, press conference yesterday, Bernanke has awakened fears of a general weakening of currencies, particularly the dollar. This can dramatically increase traction investors to buy gold. Although in fact the peak of physical purchases of gold ETF funds peaked in mid-December and then fell to 5% by mid-March, now played about half of this decline, reflecting the return of appetite for such investments after the glut at the end of last year.
Real interest rates have fallen in the world, and we have previously noted the excellent working relationship between real interest rates and gold, shows that investors are more inclined to buy assets that are not yielding fixed income, when real interest rates are relatively low. Over the last month, according to our estimates, real interest rates fell by 50 basis points, adding the fundamental reason to rally gold.
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