Gold: Primed for Recovery
By Jeffrey Nichols
Despite increasingly strong supply/demand fundamentals, gold prices have continued to tread water – more or less within a narrow $100 range – having hit overhead resistance a few weeks ago near $1175 and now testing support near $1075 an ounce.
For the past year or two, financial-market expectations of U.S. Federal Reserve interest-rate policies – driven by the day-to-day flow of economic news and pronouncements by various Federal Reserve officials – have been the single-most important determinant of day-to-day fluctuations in the price of gold and the longer multi-year correction in the metal’s price.
The persistent widespread belief, so far wrong, that the Fed would soon start weaning the markets off near-zero interest rates, has weighed heavily on gold prices and fueled bubble-like conditions in many other asset markets – notably equities, long-term bonds, the U.S. dollar, New York City ap…