Gold prices rose to their highest level since 15 May

Gold prices rose by $65 to $4668, the highest since 17 May and by over $600 since the beginning of the month. Factors driving demand for gold include the effective abandonment by the United States of the “strong dollar” policy, intervention in the yen and attempts by the Treasury Department to intervene in the bond market to reduce the rate of return. Although the rate of return rebounded last week due to operational distortions, it fell by 3.8 basis points to 4.70 per cent in the 10-year period today. In addition, the Ministry of Finance threatened allies that were considering the sale of State debt, rumouring that Japan was close to the sale of bonds to cover the cost of intervention, and Saudi Arabia threatened to sell United States dollar bonds when the United States was upgrading Iran. The market demand for gold reflects the possibility that the central bank is increasing gold。