GOLD SURGES $50 OR 3.3% – BRINKS SEES 55% DECLINE IN GOLD INVENTORIES IN WEEK
JULY 11, 2013
Gold surged 3.3% or nearly $50 from $1,248/oz to $1,298/oz after Federal Reserve Chairman Ben Bernanke admitted that the U.S. economy continues to need a highly accommodative monetary policy and will do for the “foreseeable future”.
Gold climbed for a fourth day to the highest level in more than two weeks due to safe haven buying after Bernanke also admitted, what many more realistic analysts have been saying for some time, that the 7.6% unemployment rate probably “overstates the health of the labor market.” Minutes of that meeting released yesterday showed many officials wanted to see more signs that employment is improving before backing a trim to bond buying.
This is gold bullish and suggests that gold’s recent fall is overdone.
Although Bernanke’s comments are the ostensible reason for gold’s price rise, a more fundamental reason, and less reported upon, is likely to be the continuing decline of COMEX gold inventories.