Just like that, the US$ has given back all of last week’s modest gains and then some and gold is rising to another fresh record high in response. Assuming an 1100 open in the SPX and a gold price of 1165, the S&P 500 is down more than 7% this year in gold terms. Any belief that Bernanke’s comments last Monday on the US$ engendered some Fed concern (implying a change of stance to alter the trend) with its weakness was somewhat reversed with comments from Fed Pres Bullard yesterday who said he wants to continue buying MBS past the March expiration of the program. Also in an FT interview, Fed Pres Evans said the Fed may not raise rates until “late 2010, perhaps later in terms of 2011.” Thus, the belief of lower rates for longer remains. Russia’s central bank said they raised its gold holdings in Oct by 500k to 19.5mm ounces. Also helping the euro was the Nov Euro Zone composite manufacturing and services index rising to a 2 yr high.
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