Archived IMT (2010.05.12)

The latest record high in gold at $1,244 is being especially driven by bond-purchasing measures of the ECB aimed at capping sovereign bond yields, which are an explicit form of quantitative easing (despite ECB's insistence to claim sterilization at a later time). 2009 was a clear manifestation of how asset purchases from the Fed and the Bank of England drove down yields (the price of money) to extreme levels, leaving investors with little choice but to seek the safety of gold via ETFs and bullion purchases. XAUUSD oscillators are gradually stretching to overvalued territory. But as long as scepticism with the Eurozone plan remains synonymous with buying gold as a safe haven, we dont see any obstacle for $1,300/oz before quarters end. This would be especially the case as the Fed stands pat on interest rates.