If it were true that the Fed is preparing to unwind QE, I would agree -- up to a point -- that gold faces a nasty squall. But all we had from the minutes was a comment that an undisclosed number of FOMC voters fear inflation and financial bubbles and think the Fed should stand ready to cut back on bond purchases earlier than thought.

How many times before have we heard "exit talk" from Fed hawks? We know who they are. They make a lot of noise. They are routinely ignored. The policy is dictated by the Fed Board and by Ben Bernanke, and there is little sign yet that the board is about to turn.


The Chinese don't declare gold purchases, but it is an open secret that are buying on every dip, as they have to do merely to keep the proportion stable at 2pc of their $3.3 trillion reserves. Chinese managers at SAFE must be licking their chops at this week's chatter about a Death's Cross.

I might add that China would have to buy vast amounts of gold to raise the share to 10pc, a figure mooted by some officials in Beijing.


So hold your nerve. The reality is that we have been moving for several years to an informal Gold Standard in which gold takes its place once again as a central store of value -- a currency of sorts -- in the mix of sovereign reserves.

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