| Upbeat manufacturing data from China notwithstanding, all commodities have been exhibiting price volatility. In line with this, gold saw the third weekly drop, the longest streak of decline since September, amid speculation that an improvement in the US labour market will reduce investor appetite for the yellow metal, considered a safe haven. On August 1, gold traded in the international spot market near the lowest point in six weeks at $1,284 a troy ounce.
Normally, major events like a war or a terrorist attack lead to a spike in inflation as supply of certain goods (crude oil, for example) gets disrupted, increasing their demand. Going by the same logic, rising geopolitical uncertainties — be it in Ukraine or West Asia — is a fertile ground for gold. The metal sees a price spurt in such times because of safe haven demand and also because its price constantly gets adjusted to inflation...............................................Full Article: Source
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