Recent developments in the United States, Europe and Japan point to monetary easing on a global basis being around for quite some time. Gold Fields (GFI, quote) offers shareholders protection against the adverse effects of central bankers debasing fiat currencies along with a strong dividend yield.
After the hope and speculation ahead of the FOMC statement yesterday, gold lost more than it gained.
Commodity prices are broadly lower ahead of the EU summit and a disappointing unemployment rate in Germany, which jumped to 6.8%.
The fallout from the FOMC meeting has been felt far and wide since the statement. The clear winner has been the U.S. dollar with the dollar index climbing nearly 1% to 82.40 today. Traders have shifted gears from risk-on to a clear risk-off sentiment as fear continues to run rampant throughout markets.
Gold is moving higher for the second day in a row today, driven by headlines from Spain and the looming Greek elections on Sunday. Gold bugs are focusing on a series of comments out of the euro zone, starting with IMF comments on Monday that gold is still a good safe haven.
What do the horribly disappointing U.S. non-farm payroll report, weakening Chinese service sector data and another round of euro zone bank bailouts have in common?
Overnight most markets carried forward the pain of risk-off trading on renewed worries of Spain and Greece, and now Italy too. Spain and Italy’s bond yields surged once again as both countries attempt to sell their debt on the open market.