Berita Semasa 6 Ogos 2012 ...

   Gold investors hold firm

By Nicholas Brooks from http://www.moneyobserver.com/news/12-08-03/gold-investors-hold-firm

Despite general market disappointment, the US Fed, the European Central Bank (ECB) and the Bank of England (BoE) did not act more aggressively to ease monetary policy this week. As a result, the gold price held relatively firm, highlighting that most investors continue to focus on medium- to long-term macroeconomic fundamentals and what they imply for monetary policy later this year.
Yesterday, when it became clear during ECB President Mario Draghi’s press conference that the central bank would not be moving immediately to directly buy government bonds, risk assets fell across the board. Spanish and Italian equities received particularly harsh treatment, ending the day down 5.2 per cent and 4.6 per cent respectively. The gold price fell 1 per cent.
While the Fed, the ECB and the BoE did not announce any immediate new policies to add liquidity to financial systems and ease the strain on Spanish and Italian bond yields, the clear message from all three of the guardians of the world’s major reserve currencies is that if fundamentals do not improve quickly, more monetary easing and unconventional policies are coming.  
What does this mean for the gold price? Historically, gold has tended to perform best during periods of low real interest rates and high monetary expansion, as they are generally linked with currency debasement and systemic financial failures. Gold has historically been viewed as the ultimate store of value when investors lose faith in the governments and financial systems backing currencies.
In addition, the demand for gold has tended to move inversely to real interest rates due to the reduced opportunity cost of holding gold versus interest-bearing investments and its inflation hedge properties. With most developed economy governments faced with slowing economic growth and structurally burdened by the need for multiple years of government, bank and consumer deleveraging, real interest rates have been pushed to exceptionally low levels and are likely to remain there for many years to come. Most central banks have adopted some form of quantitative easing (QE) and other unconventional monetary policies to support growth and financial systems. For example, the US Fed has more than tripled the US base money supply through two rounds of quantitative easing, raising concerns about the future real purchasing power of the US dollar, increasing demand for gold as a hedge.
In recent weeks, it has become increasingly clear that further quantitative easing and other forms of easing from the US Fed and the ECB are the main catalysts gold investors are waiting for. The gold price jumped by 6 per cent at the end of May as weaker than expected US non-farm payroll numbers lifted investors’ hopes of further quantitative easing. Yet, the gold price rise was short-lived as Bernanke, speaking at the Federal Open Market Committee meeting on 20 June, affirmed his intentions to extend Operation Twist by $267 billion (£172 billion), disappointing investors who were hoping for a third QE programme to be announced.
However, the Fed this week has made it clear that with inflation now under control, its focus is increasingly skewed towards the second objective of its double mandate – job creation. The US needs employment growth of 100,000 just to maintain 'stability' in the job market. The indication from recent Fed statements is that consistent numbers below 150,000 are likely to trigger another round of QE. If non-farm payrolls and other growth indicators such as the monthly Institute for Supply Management surveys do not quickly show substantial and sustainable improvement, a new round of QE seems increasingly likely. With some form of QE3 from the US getting closer and the ECB yesterday clearly indicating that it is preparing the way for further rounds of bond purchases and other unconventional policies, there are good reasons to believe the gold price will move higher in the coming months.

Source:http://www.moneyobserver.com/news/12-08-03/gold-investors-hold-firm