The yellow metal is slowly clambering out of the pit it fell into last month. Having slumped to $1,350 an ounce in mid-April, it has since regained the $1,450 mark and hovered around this level for a fortnight.
On the plus side, Asian and American buyers have flocked to scoop up some cheap coins or bars, says Emiko Terazono in the FT. The US mint says that sales of American Eagle gold coins reached their second-highest level in a decade last month, eclipsed only by December 2009.
Strong physical demand has put a floor under the gold price, but the "upside seems limited", given investors are still reducing their holdings of paper gold assets, such as exchange-traded funds and futures, says Saxo Bank.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Yet this trend seems likely to reverse in the future as the investment case remains solid. Central banks are keeping monetary policy loose, with the European Central Bank cutting rates and Japan and the US continuing to print. Low real interest rates and printed money will continue to debase currencies and could eventually fuel a sharp jump in inflation.
There is also still ample scope for geopolitical tension and a worsening of the euro crisis. Gold may be in the doldrums for now, but the bull market that began in 2001 doesn't look to be over yet.
-
Lloyds axes foreign currency fees for Club Lloyds customersClub Lloyds customers will be able to withdraw their money abroad without incurring any extra fees
-
How to invest during stagflationTrump’s tariffs look poised to push the global economy into a period of stagflation. We look at how to ensure your investments can survive a global slowdown.
-
Gold could set new records, even from here – here’s how to investNews The gold price has soared in recent days, and it could go higher yet, says John Stepek. Either way, you should hold some gold in your portfolio.
-
Gold: expect $2,400 by next summerFeatures A 'golden cross' in the gold market signals the bull market is alive and well.
-
Is the gold bull market over?
Features Gold has slid by a fifth from last summer's highs. But with the global outlook still gloomy, is it really time to sell?
-
How much higher can gold go?Features With governments and central banks intervening in the currency and bond markets on a daily basis, it's little wonder that jittery investors are being drawn to gold - it's one of the few 'free' markets left. But how much higher can it really go? John Stepek investigates.
-
Why gold is hitting record highsFeatures What exactly is behind gold's new record highs? And how long can the bull run last?
-
The race to the bottom in currenciesFeatures Recent action on the foreign exchanges has been perverse. The lower a central bank's interest rate, the better it was for its currency. Adrian Ash explains what's going on, and what it means for investors.
-
Daily gold report: Thursday 5th July
Features Spot gold prices continued to trade in a tight range early on Thursday, just breaking $656.50 at the London opening – barely $1 away from where the US markets left gold...
-
Why the gold price is set to double
Features Veteran gold commentator Paul van Eeden believes that the price of base metals will be battered by a US slowdown. But the good news is that a US slump will see the price of gold soar...
