The Daily Nugget: Gold Price Climbs

On Thursday, gold futures soared to 4-month high whilst spot gold also finished the day higher than previous days this week. Analysts attribute this glowing finish to poorer than expected flash PMI data from China and of, course, renewed hopes of easing from the US Federal Reserve. It seems that many were surprised by just how high the number of FOMC members was in favour of pressing the "print" button.

Also Thursday, eurozone members showed they are still struggling to contain the eurozone crisis with Merkel and Hollande forced to resort to strong words in the direction of Greece.

On Thursday, the Bank of England published it’s response to a request from MPs to look in to the effects of its asset purchase programme. Whilst the report stated that pensioners and savers are actually better off as a result of the money printing, we’re not sure many will agree. The bank argues that had they not implemented the programme the economy overall would’ve been worse off therefore causing a "detrimental impact to savers and pensioners along with every other group in our society."

The Bank of England seem to have forgotten, or at least hope we all have, that savers are the back bone of this economy. They facilitate investment and are the only ones able to buy the big things – such as new kitchens and holidays. However our level of saving is decreasing rapidly, we now rank merely 50th in the world and 4th from bottom in Europe, with just some of the PIIGS below us.

It’s not a great day when Great Britain realises we are just one floor up from the PIIGS, and not all of them in fact, just Portugal, Ireland and Greece. But if our own central bank, supposedly protector of the British pound, is unable to realise just how much destruction they leave in their wake, then we need to react and place our life savings in something which is unable to be printed hundreds of times over.

Gold Price Monthly Highs

This week has been an excellent week for the gold price as its status as a safe haven against central bank’s inflationary policies and economic downturn was confirmed. A Bloomberg survey showed investors are at their most bullish in 9 months when it comes to gold bullion investment.

There isn’t much to get excited about today, and of course we’re coming up to a bank holiday weekend here in the UK. But we’ll all be keeping an eye on German business data set to be released on Monday. German IFO Business Climate Index, the most significant of them all, is expected to fall slightly.

Next Friday the markets will finally get what they’ve been so nervously waiting for – the Jackson Hole meeting. Some gold analysts are expecting to see the yellow metal break out of its current trading range on the bank of further easing hopes and go significantly above $1,700, others expect this to happen earlier in the week.