The activity on the gold markets suggest that futures investors smell something beyond the current Mid East melee…
From The Telegraph: -
It is hard to pinpoint why so many wealthy investors have become gold-bugs, but fears of a dollar slide are a key part of the picture.
The concern is that the US Federal Reserve will ultimately opt for easy money rather than dispensing bitter medicine to purge excesses of debt and over-spending. Neither the euro nor the yen are seen as strong enough to serve as durable alternatives.
Key EU finance ministers have already said they will resist a rise in the euro above $1.30, while Japan’s finance ministry is battling to hold down the yen.
Democrats have been warning of a dollar crash for a while, but that’s been in devilment rather than any divine insight. It’s going to happen. It’s great for holidaymakers going to the US, but not so good for UK businesses.
It will knock the shit out of our already shoddy trade balance too.
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