With the bailout of Fannie Mae and Freddie Mac over the weekend and taxpayers likely to pick up a trillion dollar plus tab, it sounds like higher taxes and higher inflation rates are inevitable. Traditionally, when traders expect higher inflation, they look to store-of-value items like gold. But gold prices are threatening to sink instead . . .

  • Silver and copper prices have already made new recent lows with silver at its lowest level since August 2007 and copper near its lows for 2008.
  • Gold prices are hovering just above the mid-August low and pressure from other metals could send gold lower, too.
  • A breakout below $773 an ounce could send gold prices down to the $650 area quickly.

Have a great week!
Trader Ed