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Gold falls too... even with the good news of oil prices falling

gold-coins-images.JPG In the turmoil of the US financial crisis...Fannie, Freddie problems and all, one would believe gold metal would still be climbing.

But oil and precious metals and commodities are falling...and falling. The good news is oil is closer to $115 a barrel and not over $150 as some analysts were predicting. Retail gas prices are dropping too.

So why, even as we speak, does gold (and even oil) keep falling...gold already down more than $200 off it's high of $1030 an ounce earlier in the year when it too was predicted to keep its climb past the $1200 mark. (Here is a good site to check for current/live prices)

The term global impact is no more a novelty of thinking. Natural disasters in China, Japan...the massive flooding in the Midwest of the US (though the death toll not anywhere as extravagant as that of China's flooding, some say the US flood is the worst flooding in recorded history), along with the financial disasters of our US mortgage and housing markets all affect the demand for energy (many are just not driving as much, businesses are finding alternative distribution means, etc), and affect those Asian and European countries grab for base gold too as their own economies now feel the slow down that might have begun in the US but now are world wide.

With world-wide economic slow down, the dollar shows a bit stronger (even as in the news it too fluctuates stronger/weaker against the complexity of factors)...and the demand for gold drops. Where the price of gold will head as the fall manufacturing cycle begins is anyone's guess.

The combination of elements that in the past might have signaled corresponding affects in other associated arenas now behave outside those expectations. Witness the rise and fall of mortgage rates behaving outside their norms of triggers.

The future should be an interesting show!


This page contains a single entry from the blog posted on August 12, 2008 9:05 AM.

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