I understand that the U.S will be putting blocks in maximum levels their banks can invest, thus limiting any potential disasters for the banks, but also reducing their profits and the U.S market reacted with the big banks down 5% having a large effect and the DOW down 2%.
The U.S dollar is strengthening against other currencies - so I am assuming that when money talks, the majority are saying that currently the U.S dollar is more of a safehaven than other currencies.
However, I am surprised that the price of Gold has retraced as hard as it has and is now below 1100 U.S. I'm expecting that if the U.S financials are being limited in terms of growth then the result will be that inflation will be slow and Obama is looking at a slow recovery with even some potential disasters along the way.
Therefore I'm expecting the price of Gold to rally back up when the dust settles when people have time to think about it. Anyone care to agree or perhaps comment to disagree?
