Well, a lot of folks are breathing a sigh of relief tonight after the Fed's cut 50 basis points on both the Fed Funds rate as well as the Discount rate. This is going to be bearish on the Dollar, as folks will want to put their euros and yen or whatever in something that pays a better interest rate. Additionally, it will spike inflation, as costs for things outside of the US will now cost more, because of the lower Dollar. This will cause the price of gold to probably test and surpass the highs from back in the 80's.
It's less than 6 hours old and already Asian trading is sending it to a more than 25 year high, with energy to send it to all time highs and beyond. Gold hit the $870's where it topped out back in January 1980, and gold reached the $730's in May of last year. Some are calling for over $1000 an ounce in the long term, though others are calling for a correction to the upper $600 range.I can't help but remember all the treasuries the Chinese were buying with all those dollars we give for their products. When they see the Dollars they're holding start to be worth less and less, I think they will start dumping their dollar denominated anythings and buying gold. Dumping Dollars will, in turn, make gold worth even more. I'm set in my gold stock (BLRV), just waiting for things to hit some peaks.
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