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Gold/Mining/Energy : Gold & Gold Stock Analysis

GLD 387.98

+1.3%

Nov 28 4:00 PM EST

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To: GST who wrote (22985)	12/4/2010 9:48:57 AM
From: kayco	Read Replies (1) of 29622

China Rate Hike - Hopefully, you are correct, but I only know what I read in the newspapers. China Rate Hike Oct 19. Gold Oct 18: $1367 per Kitco Gold Oct 22: $1322 Per WSJ, FT et al the drop in gold, oil etc due to China rate rise and fear of more rate hikes Gold Nov 9: $1421 Gold Nov 17:$1337 Per Bloomberg headline Nov 12: "Gold Drops Most in Four Months on Concern China to Boost Rates". See below article. businessweek.com RMB/USD: China has so called "dirty" float. Even if they raise interest rates, the USD may not fall much against RMB. See a CNY(RMB)index chart. Since China raised interest rates in Oct, the USD has not dropped more than 1% against the RMB. Also the USD could drop slightly against RMB but rise per basket UUP and DXY as was happening for last month due to European crisis. (Gold kept rising as dollar rose.) Yesterday's big gold jump, of course, was due to fact that dollar reversed itself and fell 1% against the Euro and Yen and 0.9% against UK pound. Additionally, China manufacturers are raising export prices. China gov can not allow USD to move very much or many China factories will have problem. If USD cheaper against RMB, China should buy more copper,gold etc and drive commodities even even higher causing more rises in export prices. So even if they raise interest rates believe they would try to keep RMB from rising against USD. China talking about spending trillions to move manufacturers to higher tech industries, once this program is underway maybe they can allow RMB to rise faster.

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