A discussion of economic and financial drivers of the gold price. Government monetary policy features prominently as shifts in interest rates, especially as it effects government bonds, can alter public perception about the favorability of debt securities as a competing class of assets. The contracting economy and high unemployment rate, however, argues that there is no political will in the current climate to allow higher interest rates as a matter of policy. The availability of gold supply is also discussed, with minimal scrap supply dismissed outright even as new mining supply has fallen into decline, a situation further exacerbated by growing environmental constraints. The potential for central bank or IMF gold sales can also weigh on the gold price, but the trend of declining sales among European banks coupled with the growth of gold reserves by other central banks, notably China, trivializes this avenue as a net negative potentiality. The impact of deflation is also discussed for its general and relative impact on asset prices. Featuring Pete Grant and Jonathan Kosares.

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