Gold Prices recovered further from yesterday's 1.4% drop early in London on Friday, recording another record-high Gold Fix at $1313 per ounce as the Euro currency hit a 7-month high to the Dollar and Western stock markets rose.
Government bonds edged lower, pushing the yield offered by 10-year US Treasury debt up to 2.54%.
Inflation in the US cost of living was today pegged at 1.4% year-on-year by the Personal Expenditure measure.
Unemployment in the 16-nation Eurozone meantime rose to 10.1% in August, new data said.
Retail sales in Germany and car sales in Japan both showed a fall.
"We think it would take much better US data and subsequently higher interest-rate expectations or a sharp sell-off in US stock markets to put gold under some substantial pressure," says the daily note from Swiss refiners MKS.
"However, [today] being a Friday and a quarter-end, we wouldn't be surprised to see the precious metals been sold off more strongly on profit taking."
Priced against a basket of the world's top 10 currencies by economic weight, gold dropped 3.3% on 1st July this year – one day after completing its strongest quarter of the last 10 years, gaining more than 14% from end-March to end-June amid the Greek-Eurozone debt crisis.
Last night Gold ended the third quarter 5% higher against the US Dollar and 3.6% higher against the Chinese Yuan, but it lost more than 5% against the Euro and almost 10% to the Aussie Dollar.
After a steep fall at the start of July, followed by a steady recovery to near-record levels, Japanese, Sterling and Indian Rupee Gold Prices were little changed.
Silver Prices rose 17.8% against the Dollar between June and end-Sept., squashing the Gold/Silver Ratio of relative prices per ounce down from 66.4 to a one-year low of 59.2.
The Gold/Silver Ratio's four-decade average now stands at 53.5.
"Heading into year-end," says a London dealer, "there seems little reason for the rally in the precious metals – and gold in particular – to come to and end."
"While speculation circulates of another round of stimulus spending from the Federal
Reserve, demand for gold could continue," says another.
"If we see more bad numbers out of the US, that will drag gold up," says a Swiss dealer, quoted by Reuters.
Over on the commodities desks Friday morning, US crude oil contracts jumped towards a 7-week high above $81 per barrel after Nigeria – the 5th-largest source of US oil imports – was today hit by two bomb explosions in the capital, Abuja.
A new report from Morgan Stanley said 1-in-4 investors surveyed believe commodities will be the best-performing asset class of the next year, compared with a 0% reading at the end of June.
The Japanese Finance Ministry meantime put a figure on Tokyo's mid-Sept. intervention in the currency markets – a record one-day sale of ¥2.1 trillion to buy $25bn of US Dollars.
Quantitative easing worth $1.7 trillion by the Federal Reserve in 2009 reduced average US interest rates by 0.035%, a new Fed study said today.
Here in London, the Bank of England announced that its "special liquidity scheme" – currently supporting £128bn in bank assets ($202bn) – won't be wound up for another 15 months.
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