Chairman Ben Bernanke’s Jackson Hole speech turned out to be quite positive for reflationary trades and this was reflected in the price action of gold and US dollar. SPDR Gold Trust (GLD) attracted nearly $2 billion in fresh assets in August, more than most exchange-traded funds. With a gain of 4.6%, August turned out to be the best month for gold since January. Dollar index declined by more than 1.8% in August – its worst monthly decline of 2012.
GLD peaked at 185.85 a year ago on September 6, 2011. Since then it has been on a bumpy ride. During this bouncy journey, GLD dropped to 148.27 on December 29, 2011 – a 20% decline from the high and officially bear market territory. GLD’s rough ride also coincided with a significant rally in the U.S. dollar. Usually, a rising dollar is bad for gold – at least for the gold contracts denominated in dollar.
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