Lunch of unnecessary pain

This is not a cash cow or a gold bull, it is a milk jug on the window sill next to where I ate toast and tomatos in a freezing kitchen in Hackney. As I ate the radio told me that the Bank of England had decided to inject another £50bn into the UK economy and that Greece had agreed to austerity measures. (Here's the FT on both: euro climbs on hopes of Athens deal).

I thought both of these would make buying gold an unlikely event today. I was imagining that the pound would have fallen in value as more QE would undermine the currency and I thought the gold price would rise - everything would rise - on good news about Greece.

It looks like I was wrong on both counts. The pound actually gained against the dollar and gold was looking cheaper for UK investors for a moment. Alice Ross in the FT said: "Analysts said that markets had already priced in a fresh £50bn of liquidity, with the rise in sterling suggesting fears that the BoE could have announced a higher level of £75bn had it not been for recent signs of improvement within the UK economy."

The chart shows ETF Securities' PHAU (US $ denominated physical gold ETF) vs PHGP (pound sterling denominated physical gold ETF).

Although since writing the above the price of gold may now be on its way up a bit ($1,740ish):

So it's back to waiting for the price of gold to fall. I think it will happen but I've generally been wrong in most of my thinking so far.