Herein lies one of many inexplicable paradoxs of the USA...

  1. 2,452 Posts.
    Herein lies one of many inexplicable paradoxs of the USA Economy....Or rather the reaction to some of its indicators....
    Price of gold is higher......Yet the HUI and XAU are unsynchronisingly low .....
    Why?
    This is why: Some analysts saythat a low growth rate figure indicates (correctly) a slowing of the US economy (as if ever it had gathered a fast pace...).
    That is good for gold for two reasons...
    A) People are looking to invest their money in safer places than the stock market, and B) Low growth rate means NO more interest rate hikes for the time being, which is -seemingly- good for gold (more so for gold stocks).
    However, the other school of thought claims that a slowing of the economy (low growth rate) is not necessarily good for gold for, it means that inflation (gold's greatest ally) is not a threat to the economy, hence the price of gold may not rise...
    So...which of the two stands to be correct?
    One of the many paradoxes, that the cyclothymic behaviour of the USA economy is presenting us with, at the moment....
    The choice is your!!!!!
 
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