Sunday, February 13, 2005


Gold A Hedge On Deflation?

Writer Josh Reuben over at The Wall Street Examiner has a report on the gold markets' reaction to falling bond yeilds and asset inflation. While I subscribe more toward the technical explanation of price movement, he demonstrates that gold hasn't performed as the fundamentals would suggest.

"Has gold been a poor hedge for inflation? It would appear so." Ouch! But wait."While the conventional wisdom holds that all assets including gold would decline in a deflationary scenario, following which precious metals would outperform, the alternate scenario would have a run on bonds coincide with a rally in gold".

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