Crude Prices, Central Bank Gold Purchases, Gold Prices, Commodities Currencies
West Texas Intermediate (WTI) crude oil was down 1.21 percent to $91.01 a barrel Thursday, but the Energy Select Sector SPDR ETF (NYSE: XLE) was unaffected, and was flat by mid-day Thursday.
The World Gold Council issued a report that there is more to the rising price of the precious metals than investor's worry of future inflation. While gold is being sought out by many investors as a hedge against inflation, the report stated that many central banks are also seeking out the yellow metal as a hedge against currency debasement, and as a form of insurance against rapid market price reversals.
The World Gold Council also reported that many central banks are increasing their holdings of gold, including the central banks of Russia, Ukraine, and Turkey.
Many say the accelerated increase of gold reserve buying leading to an added increase in the price of gold beyond the usual jewelry, bar and coin, and ETF demand.
The SPDR Gold Trust (NYSE: GLD) was at $169.14 at midday, down 0.23 percent from the day before, while the popular silver ETF iShares Silver Trust (NYSE: SLV) was at $31.98, down 0.44 percent. SLV was down less than twice as much as the gold ETF, which shows a certain amount of resilience to the price of silver, as silver is known to be very volatile on the downside when compared to the price of gold.
The downward pressure in the metals was mainly due to the strength of the US dollar. The strength of the dollar could be seen in the dip in values of many of the CurrencyShares Euro Trust (NYSE: FXE) at $130.11, down 0.44 percent.
The commodity currencies as represented by the CurrencyShares Australian dollar Trust (NYSE: FXA) and the CurrencyShares Canadian Dollar Trust (NYSE: FXC) were mixed, with the CurrencyShares Canadian Dollar Trust down at mid-day to $101.29, down 0.38 percent from Wednesday.
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