Gold or Paper Money? Capital is Quitting the US but it is Heading into Euros not Gold

The price of gold bullion closely tracks liquidity and capital flows. Latest data point to broad stability in the bullion price and possibly a small future percentage rise. Further upward impetus would require either a collapse in confidence in the US dollar, triggering larger-scale capital outflows, and/ or still stronger QE injection by Central Banks. Looking ahead, we foresee neither. Even after the German Election result, we retain our view that the Euro is more likely to be the main net beneficiary as capital progressively quits the US and Central Banks reverse their QE policies.