Gold has shown remarkable resilience, and after falling initially (see the chart), prices have rebounded higher to about where they ended last week. This may indicate price strength, especially in light of lower interest rates, higher inflation, and US Dollar weakness. It is also possible that some of the funds flowing out of bonds (see my earlier post today), are flowing into gold for greater safety and protection of value.
In this earlier post, this connection between bond selling and gold buying is explained further:
Bond Vigilantes - Where Are They?
Monday, February 4, 2008
Gold Falls, Then Rebounds
