|
Inflation Scorecard: Gold Treads Water Against Currencies
|
|
Written by Brad Zigler
|
|
July 16, 2010 12:00 am EDT |
|
Real-time Monetary Inflation (last 12 months): -1.6%
|
|
Gold turned in a mixed performance against the world's reserve currencies this week, falling 0.6 percent against the euro and 0.2 percent vs. sterling. Bullion gained 1.9 percent in yen and 0.3 percent in Swiss francs. Key U.S. indicators for the week ending Thursday (GMT) included: - A 0.9 percent rise in the London morning gold fix; Thursday's $1,212 fix capped a string that averaged $1,206; COMEX spot averaging $1,207 to settle 1.0 percent higher at $1,208; average daily COMEX gold volume declining by 24.3 percent to 132,743 contracts; average open interest slipping 3.1 percent lower to 574,749 contracts; an addition of 80,922 ounces to COMEX gold warehouse stocks; the 11.041 million ounces now on hand can cover 19.0 percent of open interest.
- Three-month London gold lease rates remaining flat.
- The Market Vectors Junior Gold Miners ETF (NYSE Arca: GDXJ) appreciating 3.2 percent vs. a 1.6 percent gain for the senior producers populating the Market Vectors Gold Miners ETF (NYSE Arca: GDX); the S&P 500 Composite's 2.5 percent gain brought the blue chip index's correlation to GDX down 6 percentage points to 44 percent; the S&P 500's correlation to bullion ratcheted 12 points upward to -2 percent.
- A 1.6 percent increase rise in NYMEX WTI crude oil to $76.62; the gold/oil multiple inched down to 15.8x.
- Yields on three-month Treasury bills remaining flat at 15 basis points (0.15 percent); a flat Libor yield kept the TED spread—a rate premium for interbank lending—at 37 basis points..
- COMEX gold futures pricing an internal financing rate of 20 basis points, a 7 point discount to one-year Treasurys.
- Long bond yields falling 3 basis points to 3.97 percent, compressing the yield curve to 382 basis points.
- A 1.0 percent gain in the euro vs. the U.S. dollar; cross rates averaged $1.2608 for the week to finish at $1.2726.
- Further moderation in disinflation; the one-year monetary inflation rate stepped up to -1.7 percent from -2.6 percent; at today's rate, the real return on three-month Treasury bills is 178 basis points.
Real (Adjusted For Monetary Inflation) Yield On Three-Month T-Bills 
|
