oil and goldI’ve been reading a lot of reports on gold and where people expect it to go. Some people think that the US economy is coming back and that everyone is going to jump into the markets and drive gold down to 850’s. They base this on a few ideas and one of them is that Oil is stabilizing. Oil prices use to be a sign of a strong US economy buying up all the supply but it also put strain on the currency. Oil up dollar down. This last rally was different but if oil prices keep going up it will soon be a huge expense for Americans and will again put pressure on the dollar and drive gold prices higher.
I think oil prices are stabilizing because of China and OPEC cutting production, not because the US economy is getting better. I also think this rally was technical based and not fundamental based and therefore will not last.
I don’t think we will go below 900 but if we do it will be short lived.
Anyone disagree with me?