Chinese Pay $18 or 1.3% Premium to Buy Gold as Inflation, Currency Hedge
Monday, 9 September 2013
Gold rose in Shanghai on the open and gained 1.2% to 277.15 yuan per gramme prior to aggressive selling capped price gains. Gold inched down in London and the belief that the Fed will announce a reduction in quantitative easing at their policy meeting next week may be leading to weakness.
After peculiar selling, gold bungee jumped higher on safe haven buying on Friday after U.S. economic data highlighted that employers added fewer jobs than expected in August showing the very anaemic state of the U.S. economy.
A Bloomberg survey showed an average of 34 economists believe the U.S. Fed will reduce bond purchases from $85 to $75 billion per month next week. However, whether the Fed tapers or does not taper is far less important than the fact that monetary policies are set to remain extremely loose for the foreseeable future which will support gold.