What can we expect from now on more about the evolution of the price of gold? Metal quotation is probably drawing the attention of investors, many of whom re-estimated with disenchantment they have arrived late to take advantage of the rise of the precious metal. However, there are grounds for thinking that continue breaking records in the coming months. Our editor, Paola Pecora has recommended a safe option to bet on gold in its Global value investment report. Click here for more details. From the side of the dollar, the American currency follow very probably weak this year and also during 2010. Deflation is definitely a threat today, said Stiglitz whom Charles Evans of the Chicago Fed supported by saying: the desinflacionarios winds are blowing strongly. It is increasingly strong expectations that the Fed keep the benchmark interest rate unchanged for much of 2010.
Stiglitz is convinced of this: the combination of the threat of deflation and a slow recovery must prevent the Fed Act for a while. Monetary policy of the Fed, arguments must be added from the demand side that will continue stimulating on the upside to the price of gold. The recovery of economies will be an explanatory element of increased demand for gold for ornamental purposes (with China and India as major purchasers), portion of the demand that has been growing strongly until the crisis. On the other hand, the policy of diversification of international reserves which is observed in the majority of countries and having gold as a component that is gaining participation within the reserves of central banks, is another element that will underpin its price. And logically, inevitable speculators who anticiparan and bet by the rise in gold, give you an extra strength to keep it upward. The dollar did not react during the crisis, was ironing. Now that he is coming out of the same and contradicting the logic, is Frank booming and promising higher returns.