Gold prices will not tolerate quantitative easing

Gold prices will not tolerate quantitative easing

The price of gold at the beginning of the day renewed its all-time high, reaching $ 1911.46 per troy ounce. Speculative demand for the precious metal is backed by investor uncertainty in the recovery of the US economy, as well as a quick fix to the eurozone debt crisis. Only the next phase of quantitative easing in the United States can reduce interest in gold, whose statements are expected from the head of the Federal Reserve System (FRS) by the end of the week.

Early in the morning, Moscow time, the price of gold on the OTC market exceeded for the first time in history the level of $ 1,900 per troy ounce. According to Reuters, about 3:00 Moscow time, quotes reached $ 1,911.46 per ounce. This is 0.8% higher than the previous day’s close. Since early August alone, the price of gold has risen 16.8%. This has been the best month for the precious metal since September 1999, according to Bloomberg. Since the beginning of the year, gold has risen in price by almost 35%.

Growing interest in the precious metal continues in the context of the instability of the US economy, as well as in the absence of progress in resolving the debt crisis in the eurozone. “Gold continues to soar even in the midst of a strengthening dollar, much stronger than bonds or other defensive assets,” analyst Morgan Stanley Australia Ltd. said in an interview with Bloomberg. Peter Richardson. In addition, according to VTB Capital analyst Andrei Kryuchenkov, in the current environment, gold remains one of the few alternatives to preserve assets, especially since the Bank of Japan and the Swiss People’s Bank reduce the attractiveness of their currencies through interventions in the market.

The latest World Gold Council (WGC) research shows a decline in aggregate demand for gold in the second quarter of 2011, to 919.8 tonnes, which is 17% lower than the same period last year. At the same time, investment demand is reviving again. In the second quarter, gold ETF assets grew 52 tonnes, compared to an outflow of 62.1 tonnes in the first quarter, and decreased by 82% compared to the previous year. At the end of last week, the assets of the largest fund “gold” SPDR Gold Trust increased by 30.6 tons – up to 1290.8 tons, which is only 2.3% lower than last year’s record – 1320.4 tons . At the same time, billionaire George Soros has reduced his investments in SPDR Gold Trust, while another billionaire, John Paulson, holds a large stake in it (31.5 million shares).

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