petersl

Headwinds for Gold?

Ah yes, your thesis is absolutely correct, that gold prices are in large part dependent on the world fiat currency picture i.e., that if all currencies are strengthened by governmental policies (raising short term rates, reducing money supply), and weakened by the opposite. However, to what extent do you believe that the central banks of this world will use that lever in the face of a declining employment picture? The numbers released in the job report on Friday understate the case, see John Mauldin's piece dated June 6, 2008, entitled, "When Bubbles Collide."