by Alasdair MacLeod
Gold and silver resumed their march upwards, with gold challenging the early July high at $1367 on Tuesday.
Currencies were being driven by yen strength/dollar weakness, benefiting gold in dollar terms. After a pause in gold’s upwards momentum on Wednesday, yesterday (Thursday) the Bank of England announced its quarter-point base rate cut, £70bn in extra quantitative easing, and assistance to the banks for lending amounting to a further £100bn. More on this below.
Silver also performed well, but interestingly its strength seemed to come during Asian trading hours, unlike gold’s which came during US trading hours. Could it be that gold demand in Asia is being replaced by demand for its cheaper cousin, while in the West we are obsessing about monetary policies, and the increasing likelihood of a Eurozone banking crisis?