In what is it's biggest rise since February gold Friday traded higher after posting an 8.8% rise in June, it's fifth weekly move up as a weaker dollar and Furher Brexit fallout capture invesot attention. The weaker dollar stems pretty much the slow growth in the U.S. economy now complicated by the prospect if the Btish central bank cutting interest rates later the summer and the Bank ig Japan doing further monetary policy easing.
Gold closed Friday 1.2% higher at $1,336.01 after hitting a session high of $1,341.40 an ounce. The upswing gold didn't escape investor attraction yor it's sister precious metal, silver, which broke through $19 an ounce foe the first time in nearly two years. The metal is up 8% this week. Though gold garners most of the attention both are seen as safe investment havens in the eyes of many investors, especially in uncertain times like these. There's another meme here we think that is mostly overlooked or arrogantly discount with all this money printing is agricultural commodity inflation.
Asking where it's going to come from at this point is the wrong question. The right question is what are the unexpecteds? A recent example for you is the Brexit vote.
The fallout tentacles from Brexit, as is often the case with unknowns, extend further it appears than expected. Toss in the prospect of possible further easy money policy from central banks and the fact that even putting the Fed on temporary hold is seen by some as a form of easing and the upswing in prices for gold and silver make some sense. Measured against a basket of six currencies the dollar was down 0.4% Friday. With further cental bank easing by the Bank of England, the ECB and the Bank of Japan almost a given, gold and silver prices are discounting those future events now.
Meanwhile, the Fed gets to continue the only face-saving play it has left, guess when, if you can investors, we will hike rates again? In the interim enjoy yourselves searching for clues.
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