What’s next for the Dollar and Currencies? Updated Merk Outlook August 2013

In the short to medium term, the U.S. dollar and currencies are heavily influenced by the actions of the Fed. As the Fed may be reading tealeaves as much as anyone else, we may be facing particularly high policy uncertainty that, in turn, reflects on elevated volatility in the bond and currency markets. The good news is that this may yield opportunities for the prudent investor.

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Gold Nears 10% Monthly Gain Ahead of Fed Decision as US Economy Surges, Inflation Flatlines

The price of wholesale gold fell back to $1320 per ounce Wednesday lunchtime in London as new data showed the US economy expanding faster-than-expected. Second quarter GDP rose 1.7% in real terms from a year earlier, the Bureau of Economic Analysis said.

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Gold Defies “Key Reversal” as China Launches “Mini-Stimulus”, Miners De-Hedge

Wholesale gold rallied from a drop to $1310 per ounce Thursday lunchtime in London, gaining as world stock markets also cut earlier losses. Trading back above $1322 – a two-year low when hit by April’s gold crash – spot bullion also rallied 1.0% for Euro and Sterling investors.

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If the Fed is going to begin taking away the punchbowl why is the dollar tanking?

For a number of weeks the Fed has been talking about “tapering” its asset purchases, and from the recent spike in US government bond yields and the decline in US equities it seems as though investors them at their word. This does however raise an interesting question: If the Fed really is going to begin taking away the punchbowl why is the dollar tanking?

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Dollar At Risk? Case for Managing Currency Risk

The “cleanest” dirty shirt, the U.S. dollar, is down versus the euro so far this year; and was down last year. If this is a strong dollar environment, are investors prepared for a weak one? With plenty of dirty laundry in the world, we ponder how investors might be able to profit from actively managing currency risk.

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