The Daily Nugget – gold price to finish week lower

Whilst the gold price finished lower yesterday it had improved from lows seen earlier in the day. It is expected to finish the week about 1 per cent lower on the week.

Gold-backed ETFs remain popular, despite dropping to a one week low yesterday as investors George Soros and Louis Bacon increased their stakes in them.

Gold investment sits out eco-political uncertanties

This week has left citizens feeling even more unsure as to how governments will sort out their political and economic crises.

Whilst Obama’s press conference on Wednesday appears to have reassured some that a resolution over the fiscal cliff will be reached in time, today US budget talks will begin between those involved in the same (unresolved) discussions last year. Discussions in the run up to the deadline may make gold investment an uncomfortable prospect over the next few weeks, however, whichever resolution is reached will be one for the short-term as the ‘solution’ will no doubt be a compromise, leading to further stimulus and therefore great conditions for gold investment.

Data released from Brussels yesterday confirmed eurogeddon is truly on the way as the area is back in recession. France and Germany continue to buck the trend managing 0.2% growth in Q3 however the other countries disappointed including the Netherlands which was unexpected by some economists.

Draghi acknowledged yesterday that the ECB’s 0.75% rate was not reaching businesses and households. He told an Italian university that the impact and reach of the rates had been varied in different countries within the single currency union, “In some countries, the rate cuts were fully passed on. In others, the rates charged on loans declined only little. And in others, some rates have actually risen.” And there, ladies and gentlemen, you have heard Draghi acknowledge exactly why the Eurozone could never work and what an utter omnishambles it is, but he just hasn’t realised it yet.

Retail sales in the UK disappointed analysts who had been hoping for a spending revival in October. Why they were hoping for an upsurge in spending, I’m not sure. Surely the month after you’ve packed the kids off to school, you’ve just finished paying off the summer holidays and you’ve got Christmas on the horizon you would rein in spending a bit? But no one else agreed and as a result of the data sterling fell against both the dollar and the euro during the day.

However the world’s attention is distracted from the financial news and instead focused on the Middle East region which is growing evermore uneasy with the situation between Israel and Hammas. For the gold investor’s perspective, should military action result this will prove beneficial for gold given its safe-haven status.

About the Author

Jan SkoylesJan Skoyles is Head of Research at The Real Asset Company, a platform for secure and efficient gold investment. Jan first became interested in precious metals and sound money when she met Ned Naylor-Leyland whilst working alongside him in the summer of 2010. Jan then went on to write her undergraduate dissertation on the use of precious metals in the monetary system. After graduating from Aston University in 2011 Jan joined The Real Asset Co research desk. Her work and views are now featured on a range of media including BBC, Reuters, Wall Street Journal, Mail on Sunday, Forbes and The Telegraph. She has appeared on news channels including Russia Today to discuss the gold price and gold investing. You can keep up with Jan's commentary by subscribing to our RSS feed Gold Investment News.View all posts by Jan Skoyles