The Cheaper ‘Buck’ Driving Gold Price North

#gold #silver #dollars #currencies #risk #Fed #interestrates #USChina


Spot gold topped 1,900oz for the 1st time since September 2011 and edged closer to an all-time high with flaring geopolitical tensions and concern over global growth driving demand for save-haven assets.

Gold marked a 7th wkly gainer, the longest run since Y 2011, while silver made its biggest weekly advance in 40 yrs.

Seeing gold marking all-time high early this week.

Gold and emerging-market currencies have just marked a new risk-off milestone.

The benchmark index for developing-nation currencies is set for its biggest weekly decliner since March relative to spot gold, underscoring the gloomy economic outlook and escalating US-China tensions. That has taken their ratio to a record low, according to data going back to Y 1997.

Gold’s advance in a world of loosening monetary policies is luring flows away from the assets of emerging-market nations as they struggle with mounting fiscal woes and a patchy economic outlook.

The weak USD has failed to bolster developing-nation currencies.

Disruptions to global trade, remittances or tourism create a shortage of USDs in emerging markets, weakening their currencies.

When the local central banks reduce interest rates to catch up with the Fed, the resulting dive in yield can undo the benefits of a cheaper Buck.

We have adopted a strategy of investing simultaneously in Aristocrat assets on 1 side, and gold + junior miners, the primary beneficiaries of the fiscal and monetary easing.

Have a healthy weekend, Keep the Faith!