The price of gold today was up $6.50, or 0.58%, at $1121.30 an ounce in early trading amid additional safe-haven buying from investors.
That followed a 1.7% gain last week to $1,112.70 an ounce. That was the biggest weekly gain for gold prices since mid-June.
Demand was robust last week following China's devaluation of the tightly regulated yuan. The surprising move sent worldwide equity markets lower and sparked worries of a heated currency war.
"What China has done is initiate another battle in the ongoing currency wars," Adrian Day, president of Adrian Day Asset Management in Annapolis, Md., told Bloomberg. "In these wars, there can only be one winner, which is gold."
You see, other Asian countries are already feeling pain. Data Monday from Japan's Cabinet Office showed the country's gross domestic product (GDP) contracted at an annualized pace of 1.6% in the April to June period as exports shrank and consumers trimmed spending.
The dismal data suggests Japan's economy is facing a standstill. It also puts additional pressure on policymakers to further juice the economy via additional monetary or fiscal stimulus.
Economic woes in Brazil also have investors buying gold.
The world's seventh-largest economy has declined for 12 straight months, marking the longest and deepest recession in 25 years. And despite declining growth, inflation continues to surge, causing interest rates to rise. On top of all that wreckage, the Brazilian currency is down 53% over the last 12 months.
And then there's Greece. Friday's third bailout package in as many years has failed to spark confidence that the ailing Mediterranean country can recover from its deep fiscal and political fallouts.
But it isn't just global economic concerns that are sending the price of gold today higher. The Fed is playing a large role too...
Fed Minutes in Focus as Price of Gold Today Climbs
Precious metal investors are likely to proceed cautiously ahead of Wednesday's release of the FOMC minutes from last month's meeting. The wording will be scoured for any clues on the timing of the first U.S. interest rate hike since June 2006.
So far, gold prices are holding firm.
"Gold is successfully defying the recent increase again in Fed rate-hike expectations," says Commerzbank. "According to Fed fund futures, the market is again factoring in a 50% probability of a rate hike in September, this having dipped for a time last week to a good 30%."
Still, the U.S. Federal Reserve has pledged to move slowly with additional hikes after its first rate increase.
Also scheduled for release Wednesday is the market moving U.S. Consumer Price Index, the most widely used measure of inflation.
We recommend every diversified portfolio have a position in gold now. And these are the best ways to buy gold today...
How to Buy Gold Today
Gold serves many purposes as part of an overall diversified portfolio. It plays a role when inflation accelerates, global economic growth stalls, and acts an insurance policy against sudden risks. Those are all real risks currently.
Investors have three options when it comes to guarding against these risks by buying gold.
Coins: When buying physical gold, consider gold coins, but not collectible numismatics or rare coins, Money Morning Resource Specialist Peter Krauth advises. "Instead, look for some of the most common, widely owned, and highly regarded gold coins whose cost is closely tied to their gold content," Krauth said. Here's what to look for when buying gold coins...
Bars: Gold bars are another option. Large bars are heavy and bulky, making them pricey to store, insure, and transport. Small bars, also called ingots, are available in sizes ranging from a tenth-ounce up to 400 ounces. Large or small, "make sure the bars you want to buy are considered good delivery," Krauth stresses. The London Bullion Market Association (LBMA) and the New York Mercantile Exchange (NYMEX) are regarded as industry standards, and they publish lists of reputable refiners. If the bar's refiner is on that list, then it is considered "good delivery."
Paper Gold: Paper gold is another means investors use to own and play gold. Included in this space is everything from gold futures to exchange-traded funds (ETFs). These gold investments come with a bold asterisk, as Krauth explains. "These aren't substitutes for physical gold and should not be treated as such. Many consider even physically backed gold ETFs to be paper gold because the investor still relies on a manager and custodian. ETFs are gold derivatives because the owner holds a piece of paper (certificate or brokerage account statement) that represents his or her claim on the gold. Another reason these are considered derivatives is because the unit prices are tied to gold but may trade at a discount or premium to the underlying value."
Whatever method you choose, make sure you first read Krauth's "How to Buy Gold While Prices Are Still Low."
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