Hot market Oct. 28, 2008 – Gold
With the amount of money the government has been pouring into banks, brokerage firms and other financial institutions, the logical line of thinking is that these moves will be quite inflationary, which should be bullish for gold prices.
- After making several runs higher, gold prices have languished well below the peaks above $1,000 recorded last March and appear to be oversold.
- The Federal Reserve Open Market Committee may cut short-term interest rates by 50 basis points Wednesday, bringing the rates down to the 1% low that has been blamed for contributing to the housing bubble.
- Gold prices have gone up in other currencies – euro, British pound, etc. – as the value of the U.S. dollar has soared, causing other currencies to weaken.
- Several VantagePoint indicators suggest that gold futures might be ready to move higher – the predicted neural index has shifted to 1.00 for the first time in several weeks, the predicted short-term difference line has turned up and prices on Monday closed above the predicted next day’s high.
- Too early to buy yet based on VantagePoint indicators but gold futures look like a market for traders to watch for a trend reversal.
