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Gold Has Retraced More Than Half of Price Swoonby Peter A. Grant
Apr 25, AM 
Gold pushed to new 8-day highs and more than half of the big price swoon has already been retraced. As paper selling initially overwhelmed the much smaller physical market nearly two-weeks ago, now it is demand in that smaller physical market that is overwhelming the paper market.A retreat in the dollar is helping to underpin the yellow metal amid heightened concern that the U.S. economy may once again suffer during the transition from spring into summer, as it has for the past several years. This may prompt those on the FOMC advocating for a phased withdrawal of accommodations to rethink that positions. Sterling strength has contributed to pressure on the dollar. The UK preliminarily reported that GDP grew 0.3% in Q1. Now that's still a pretty crummy number, but it beat expectations of +0.1%, and most importantly prevented the UK from slipping into an "official" recession...at least until the revisions come. Rasmussen released a poll today that showed 54% of respondents believed the US is currently in recession. I would wager that a poll of UK citizens would yield a higher number than that. Nonetheless, expectations that the BoE is on the verge of increased QE have been tempered somewhat. However, the miniscule UK GDP beat notwithstanding, evidence is mounting that economic activity in the industrialized nations is slowing. Spain reported another new record high jobless rate of 27.2% today. The number of unemployed persons in Spain is now in excess of six-million. It's looking increasingly like the ECB will cut rates by 25 bp, perhaps as soon as next week. The age of super-easy monetary policy and extraordinary accommodations is alive and well. Given that reality, emerging central banks are likely to continue buying gold as means to reduce exposure to the devaluing currencies of the west. NEWSLETTER SIGN-UP Opinions expressed in commentary on the USAGOLD.com website do not constitute an offer to buy or sell, or the solicitation of an offer to buy or sell any precious metals product, nor should they be viewed in any way as investment advice or advice to buy, sell or hold. USAGOLD, Inc. recommends the purchase of physical precious metals for asset preservation purposes, not speculation. Utilization of these opinions for speculative purposes is neither suggested nor advised. Commentary is strictly for educational purposes, and as such USAGOLD does not warrant or guarantee the accuracy, timeliness or completeness of the information found here.
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