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Gold is not necessarily in decline

In the current environment of deflationary pressure, rising dollar and central bank easing looking at the gold price as quoted in CME one could presume that good day for gold is over for now. Year 2015 may not be such ca…

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Gold is not necessarily in decline
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  • In the current environment of deflationary pressure, rising dollar and central bank easing looking at the gold price as quoted in CME one could presume that good day for gold is over for now.
  • Year 2015 may not be such case for gold so far, comparing the price of gold with currencies other than the US dollar strikingly shows us this year so far has been pretty good for the gold bugs.
  • Gold has appreciated against all the major liquid currencies except the Swiss Franc, which YTD appreciated only 2.5% against gold so far.
  • Euro did worst against gold falling about 12%, followed by AUD (10.7%), CAD (9%), NZD (5.3%), GBP (3.7%), USD (2%), and JPY (1.6%).
  • Despite the risk on environment due to policy easing by the central bank, holding gold by borrowing from other currencies could become one of the top trades of 2015 should the volatility associated with gold settles down.

 

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