Auguries — The View From Davos
January 26, 2012
By Kevin Michael Grace

Gold was up (at press time) $67.50 (+4.1%) for the week to $1,724.80, and silver was up $2.86 (+9.3%) to $33.45. Reuters attributed gold’s rise to “The Federal Reserve’s pledge this week to keep US interest rates at rock-bottom levels for a number of years and its hints of fresh monetary easing.” Goldbugs ? the Ben Bernanke!

At the Globe and Mail, Simon Avery ventures a different explanation, derived from the work of Amit Bhartia and Matt Seto of GMO LLC—higher “prices have been driven not by monetary officials debasing their currencies or central banks hoarding gold bars but by consumers in emerging markets. Between 1999 and 2010, emerging Asia increased its share of global gold demand to 57% from 39%, they say, quoting data from the World Gold Council.”

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