What is Driving the Gold Market?
Posted by Larry Doyle on May 12, 2010 3:22 PM |
While equities are rebounding nicely today, overall equity volumes remain generally light. That said, there is a bigger development in the markets today. What is it? The shiny yellow stuff is on fire.
Gold is trading close to 1250/oz. and making new highs in the process.
What is driving the gold market? As The Wall Street Journal reports in writing, Gold Prices Extend Climb:
“The gold price is being driven by … the rising concern of the ‘exit strategy’ for central banks given that the ECB is the latest agency to join the (quantitative easing) bandwagon,” JP Morgan analyst Michael Jansen said in a note.
“Indeed, the perceived breach of the ECB’s independence … adds to the view that in the long-term monetary and fiscal authorities will be forced to choose between anemic economic conditions or monetary-driven inflation.”
Anemic economic conditions or monetary-driven inflation? Little wonder why we are witnessing civil unrest in Greece today. What about other Euro-zone nations? What about the UK? The US?