Gold Drops After ECB Cuts Rates to Record Low

Today’s AM fix was USD 1616.75, EUR 1292.99 and GBP 1037.58 per ounce.
Yesterday’s AM fix was USD 1617.00, EUR 1285.37 and  GBP 1032.90 per ounce.

The ECB has cut the main refinancing rate to record low of 0.75%. Gold dropped sharply immediately following the announcement, but is currently rising again.

Gold is trading at $1603.75/oz. Analysts from Standard Bank in London say that a rate cut implies a lower real interest rate, which ultimately is bullish for gold. Gold’s fundamentals have not changed.

WGC – Gold as a Strategic Asset for European Investors

During the current period of serious uncertainty in the Eurozone, the World Gold Council considers the case for gold as a long-term or strategic asset allocation for European investors. WGC claims that the consensus is that in the long-term gold is a store of value and a useful hedge against inflation. 

Nevertheless, long-term strategic investors have traditionally not been investing in gold. WGC examines evidence from several cases and finds that gold appears to add significant diversifying power to asset portfolios because it tends to be negatively correlated with most other asset classes. WGC advises that the exact allocation depends on the needs of the particular investor, and the environment. 

The full report is available on the World Gold Council website.

WGC – Gold as a Strategic Asset for UK Investors

WGC takes a holistic approach in this report, examining the role of gold as a strategic asset for UK investors. Using conservative estimates, it finds that strategic diversification into gold is statistically significant especially for low to medium-risk investors. An added benefit is that gold comes without the added complication of complex structures and with the added benefit of centuries’ worth of history. 

The chart below shows that in the long run, gold competes on the basis of its diversification qualities, rather than returns. Gold is a hard asset that carries no risk of default.

The full report is available on the World Gold Council website.

For breaking news and commentary on financial markets and gold, follow us on Twitter.

NEWS

ECB Cuts Main Rate To Record Low, Deposit Rate To Zero – Bloomberg

Gold Climbs as ECB Rate Reduction May Help Fan Inflation – Bloomberg

COMMENTARY

The Fed And LIBOR – The Biggest Manipulator Of Them All – Zero Hedge

Keiser Report: Big guy ‘scandals’ vs small fry ‘crimes’ – Max Keiser

“This Libor-manipulation story grows crazier with each passing minute.” – Rolling Stone

Draghi-King Push May Mean Bigger Step Into Zero-Rate Era – Bloomberg

Mark OByrne

Also on news-goldcore-com

Videos

Tavi Costa- The Fed is Trapped

Silver Market Predictions – Ed Steer Talks about the Silver & Gold Price

Are We In A Financial Bubble? Peter Grandich Interview

Blog posts

Lawrence Lepard – Living in a World with Inflation

Lawrence Lepard Portfolio Manager and advocate of sound money, is our guest on this episode of GoldCore TV. With 40% of money in the US being created in the last 2 years, we ask Lawrence if the Fed is trapped. If so will this mean that it is going to be very difficult for them […]

READ MORE

Supply Chain Crisis Effects on Gold & Silver

The broken chain – could the supply crunch be worse than the oil crunch of the 1970s Anyone that has bought a new or used car in the last year has faced higher prices and long wait times for delivery. This is all because of the very small but essential semiconductor, which is in short […]

READ MORE

This is a Long Term Bullish Pattern for Gold – Gareth Soloway on GoldCore TV

“This is a long term bullish pattern for gold!” – Gareth Soloway Gold In this latest episode of GoldCore TV, Gareth Soloway joins Dave Russell to discuss what what the charts are suggesting for the stock markets, bond markets and #bitcoin. In addition to this he also takes a look at his gold price forecast 2021 and beyond.Gareth identifies the key levels that […]

READ MORE

Featured

Gold, the Tried-and-True Inflation Hedge for What’s Coming!

READ MORE

How High is Too High for Rising Government Bond Yields?

READ MORE

Silver – 7 Reasons it is Still Set to Soar

READ MORE
Newsletter
Category
Archives
Popular

No posts available

Videos

Tavi Costa- The Fed is Trapped

Silver Market Predictions – Ed Steer Talks about the Silver & Gold Price

Are We In A Financial Bubble? Peter Grandich Interview

Blog posts

Lawrence Lepard – Living in a World with Inflation

Lawrence Lepard Portfolio Manager and advocate of sound money, is our guest on this episode of GoldCore TV. With 40% of money in the US being created in the last 2 years, we ask Lawrence if the Fed is trapped. If so will this mean that it is going to be very difficult for them […]

READ MORE

Supply Chain Crisis Effects on Gold & Silver

The broken chain – could the supply crunch be worse than the oil crunch of the 1970s Anyone that has bought a new or used car in the last year has faced higher prices and long wait times for delivery. This is all because of the very small but essential semiconductor, which is in short […]

READ MORE

This is a Long Term Bullish Pattern for Gold – Gareth Soloway on GoldCore TV

“This is a long term bullish pattern for gold!” – Gareth Soloway Gold In this latest episode of GoldCore TV, Gareth Soloway joins Dave Russell to discuss what what the charts are suggesting for the stock markets, bond markets and #bitcoin. In addition to this he also takes a look at his gold price forecast 2021 and beyond.Gareth identifies the key levels that […]

READ MORE

Featured

Gold, the Tried-and-True Inflation Hedge for What’s Coming!

READ MORE

How High is Too High for Rising Government Bond Yields?

READ MORE

Silver – 7 Reasons it is Still Set to Soar

READ MORE