Cold War Redux – Good for Gold
By: Jeffrey Nichols
For the past year and longer, financial-market expectations of U.S. Federal Reserve interest-rate policies have been the single-most important determinant of day-to-day fluctuations in the price of gold.
Indeed, the persistent widespread belief that the Fed would soon start weaning the markets off near-zero interest rates, however wrong, has weighed heavily on gold prices while fueling bubble-like conditions in many other asset markets – most notably equities, long-term bonds, the U.S. dollar, New York apartment prices, collectibles of all sorts, etc.
All the while, gold has virtually ignored the various geo-political hot-spots that years ago would have fueled safe-haven demand and a rising price for the yellow metal.
But now it seems that gold may be resuming its historic role as the “asset of last resort.” Indeed, with Russia flexing anew its muscles in the Middle East, it looks increasin…