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 Gold remains range bound heading into the U.S. holiday weekend.
Ongoing uncertainty surrounding last week's Brexit vote continues to underpin
the yellow metal.
The ECB expressed concern today that the pool of assets eligible for their QE
program have been depleted. So, the "real" market bought up all the
quality securities in the recent flight to quality. Rates are at record lows
and unlikely to rise anytime soon. Mission accomplished . . . right?
Apparently not. The ECB is considering loosening their own rules on QE to
allow themselves to buy more lower-grade assets. It seems like they should
just save their ammo; my sense is that they may need it in the days and
months ahead.
Bank of England governor Mark Carney acknowledged today that easing
"will likely be required over the summer."
Over the coming weeks, the Bank will consider a host of
other measures and policies to promote monetary and financial stability. In
short, the Bank of England has a plan to achieve our objectives, and by doing
so support growth, jobs and wages during a time of considerable uncertainty.
Part of that plan is ruthless truth telling. And one uncomfortable truth is
that there are limits to what the Bank of England can do. — BoE governor Mark
Carney
The Central Bank of the Republic of China (Taiwan) cut
rates again today. It was the fourth consecutive easing, amid the ongoing
contraction of their export market.
Taiwan acknowledges that they do not have much exposure to the UK; their
growth risks were mounting long before Brexit became an issue. The
uncertainty surrounding Brexit just piles an additional level of concern atop
the global growth worries.
It's becoming pretty evident that the central banks are going to continue
down the well-trod path of easier monetary policy: More ZIRP. More NIRP.
Therefore, you should be thinking more gold.
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