Niall Ferguson: Dollar Is Doomed, U.S. Empire Is Finished
October 21, 2009 by goldguru · Leave a Comment
Mark O’Byrne submits:
Gold
Gold is trading at $1.056/oz this morning and traded in a very tight range overnight. In EUR and GBP terms, gold is trading at €707/oz and £638/oz respectively.
With oil and the dollar trading near their respective recent highs and recent lows, gold continues to be well supported. It appears to be consolidating after its recent break out above previous resistance around $1,030/oz. Gold was up yesterday despite weakness seen in equity markets in the US and this equity weakness has continued in Asia and Europe. Should we have another sell off in stock markets (which looks likely) gold may also fall and be correlated in the short term. However, as seen in recent years gold will likely fall by less and recover quicker meaning that the correlation will be only in the short term. In the medium and long term, gold is inversely correlated to equities (and currencies) and this is why it remains an important diversification for prudent investors.
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