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Real-time Monetary Inflation (last 12 months): -0.5%

For the week ending Thursday, gold lost ground to all the reserve currencies, save the Swiss franc. Setting aside the US dollar, bullion strength waned most against sterling, which rose 2.2 percent. The euro set gold back 1.5 percent as the yen climbed 1.4 percent. The Swiss currency inched 0.5 percent lower.

Now, for the dollar …

* London morning gold fixes finished the week 1.4 percent lower at $1,337 after averaging $1,331; COMEX spot settlements averaged $1,333 to wrap up an off week 1.3 percent lower at $1,342; COMEX average daily volume slumped 4.8 percent to 186,033 contracts; open interest fell 21,039 contracts further to 603,411; total COMEX inventories climbed 55,922 ounces (1.7 tonnes) to 11.118 million, mostly by shifts of bullion to “eligible” status; warehouse stocks now cover 18.4 percent of open interest.

* Once again, one-year London gold lease rates held steady at an average 27 basis points (0.27 percent).

* Vault assets of the SPDR Gold Shares Trust (NYSE Arca: GLD) decreased by another 5.2 tonnes (166,059 ounces) to 1,293.1.

* The risk trade was apparently switched on for gold mining stock aficionados this week; the Gold Miners Ratio fell to 1.58 from 1.64 as exploration and development companies outpaced established producers; the share price of the Market Vectors Junior Gold Miners ETF (NYSE Arca: GDXJ) shot up 6.3 percent compared to a 4.2 percent gain for the larger-cap Market Vectors Gold Miners ETF (NYSE Arca: GDX); the S&P 500 Composite ticked up 0.3 percent while its correlation to gold producers ratcheted up another 6 points to 58 percent; the index’s correlation to bullion also rose 6 points to 44 percent.

* WTI crude oil prices rose 2.0 percent to $82.18; the gold/oil multiple fell back to 16.2x from 16.6x.

* One-year TED spreads were firm at 54 basis points as Treasury yields and Libor held steady.

* Implied finance rates in COMEX futures were at a 21 basis-point discount to one-year Treasurys, though the narrowing trend indicates market anticipation of a firmer rate environment; the one-year gold contango rose 4.1 percent on the week to $10.20.

* A 7-basis point rise in average long bond yields, coupled with a basis-point decline in three-month bills, steepened the Treasury yield curve to 388 points.

* The euro gained a basis point on the US dollar, averaging a $1.3947 cross rate.

* Daily reads of the one-year monetary inflation rate fell to -0.4 percent from -0.2 percent; at today’s rate, the real return on three-month Treasury bills is 58 basis points.

Real-Time Monetary Inflation