Thursday, January 6, 2011

Bloomberg: Gold Futures Drop for Third Straight Day on Improving Outlook for Economy

Gold Futures Drop for Third Straight Day on Improving Outlook for Economy

“Gold may be at the cusp of the end of the bull rally,” said Leonard Kaplan, the president of Prospector Asset Management in Evanston, Illinois. “Things are going well for the economy, and once interest rates start to rise, gold has to come down.”

This didn't happen during the Bush Administration.  When interest rates went up, gold continued to rise anyway.

Could it be that there are those who want the gold market to move in a new direction?  The markets are saying that the economy won't support higher interest rates without recession.  The last increase in interest rates produced a recession before it reached the level that it did in 2000.  I think this says that the growth potential in the economy is less than before.

No comments: