Wednesday, February 20, 2013
Why gold is falling
According to this article, gold is similar to a bond in some ways. When interest rates drop, the price goes higher. When interest rates rise, the price drops. So a falling gold price could be an indicator of rising interest rates.
Source: http://research.stlouisfed.org/fred2/series/DFII10/
Have interest rates finally hit a bottom? It's too hard to tell with negative interest rates, but they hit an all-time low at -0.87% on 12/10/2012, and have been slowly rising ever since. They might even hit zero by mid-summer. Will they keep rising after that?
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