Gold made a clean sweep against the world’s reserve currencies this week, particularly the yen, which posted a record-setting 4.8 percent loss. Bullion notched a new record against the greenback as well, while it rose 2.1 percent vs. the Swiss franc and 1 percent in euro. Sterling yielded 0.5 percent to gold.

In dollar-denominated assets:

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• London gold was fixed at $1,457 Thursday morning, 1.8 percent higher on the week, after averaging $1,443; COMEX spot last settled at $1,459 for a 1.4 percent gain; spot metal averaged $1,446 this week in New York; average daily COMEX volume toppled 47 percent to 140,399 contracts, but open interest surged by 31,919 contracts to 519,059.
• COMEX gold inventories fell 22,176 ounces (0.7 tonnes) to 11.011 million; 21.2 percent of open interest is now covered by warehouse stocks; 2.349 million ounces are deliverable, while immediate demand for COMEX bullion amounts to no more than 246,200 ounces.
• SPDR Gold Trust (NYSE:GLD) vault assets rose 6.0 tonnes (192,261 ounces) to 1,217.2 tonnes.
• Projected volatility for gold, measured by the weekly average of the CBOE Gold ETF Volatility Index (CBOE: GVZ), continued its decline, from 16.7 to 16.1 percent.
• The average one-year gold lease rate ticked down another basis point (0.01 percent) to 0.28 percent.
• A 6.3 percent gain in the share value of the Market Vectors Junior Gold Miners ETF (NYSE:GDXJ) outstripped a 4 percent rise in the Market Vectors Gold Miners ETF (NYSE:GDX); the S&P 500 Composite, in comparison, nosed 0.6 percent higher.
• The S&P’s correlation to gold producer stocks eased 2 points lower to 19 percent but the blue chips’ coefficient vs. bullion shot up 11 points to 10 percent.
• NYMEX WTI crude oil climbed 3.4 percent to $110.30, knocking the gold/oil multiple down from 13.7x to 13.3x.
• Gold futures traders continued to price in expectations for lower rates in their calendar spreads; the one-year COMEX contango was squeezed 60 cents an ounce, or 6.5 percent, to $8.70; London’s forward market spread widened 0.9 percent.
• One-year TED spreads widened 2 basis points to 0.50 percent.
• Another 2-point uptick in long bond yields, together with a drop in short rates, steepened the Treasury yield curve to 449 basis points.
• The euro rose 0.9 percent vs. the U.S. dollar to an average $1.4236 cross rate Thursday.
• The Monetary Inflation Index’s rolling 365-day change averaged 2.4 percent, up from 2.3 percent last week; at today’s rate, the real return on three-month Treasury bills is -130 basis points.

Real-time Monetary Inflation Rate

Note: Explanations of the Scorecard’s indicators can be found in the Hard Asset Investors’ primer articles, “Deciphering The Inflation Scorecard: Why Gold?” and “Deciphering The Inflation Scorecard: Part 2.”

Written by Brad Zigler From Hard Assets Investor

HardAssetsInvestor.com (HAI) is a research-oriented Web site devoted to sharing ideas about hard assets investing. The site has been developed as an educational resource for both individual and institutional investors interested in learning more about commodity equities, commodity futures and gold (the three major components of the hard assets marketplace). The site will focus on hard assets investing without endorsing or recommending any particular investment product.

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