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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 692.76

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Jan 26 4:00 PM EST

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To: Roebear who wrote (52237)	5/26/2000 5:40:00 PM
From: Jacob Snyder	Read Replies (1) of 99985

re: gold: As you said, we don't burn gold to run our cars or heat our houses. Gold has symbolic value, and scarcity value, and nothing else. Aside from some small uses as an industrial metal, no one needs it. You are right, when the price of oil went to a point where exploration for new supplies was uneconomical, that made a price rebound inevitable. But that's because the demand continued. With gold, it's different. Demand for gold will only increase if the alternatives start looking bad. That will happen if (and only if) investors become convinced that the value of all the reserve currencies will not (or cannot) be defended by their governments. The indicators are the inflation signals. Steadily rising inflation, and a government unable to stop the process, would cause an upturn in gold. The odds of that happening are small. Or, rather, the uptick in inflation will be small, and the Fed will accept a recession rather than a return to 6% inflation.

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