Hi loki,
I know it will be contentious but IMO the relationship between gold and Fed/ECB actions, inflation etc has been vastly overstated. Look at the evidence:
- Inflation in the developed world is virtually non-existent, in some areas deflation is a bigger concern. That's despite all the easing measures already put in place.
- Gold has risen 500%+ in the past decade but the USD hasn't declined against any currency anything like this - even the ones that have been tightening. Monetary policy might account for some short term investment related increase - when priced in USD - but doesn't account for the secular bull trend it has been in.
- India and China each consume around 4 times as much as the US and twice the total of Europe. Thailand and Vietnam together exceed the US total.
The real story behind gold is the rise in wealth in the developing world and their stronger (well in recent times) traditions and beliefs around it. So who cares what the Fed does, isn't the price of gold in Rupees more likely to impact demand?
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