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Politics : Dutch Central Bank Sale Announcement Imminent? -- Ignore unavailable to you. Want to Upgrade?

To: sea_urchin who wrote (20307)	3/2/2004 6:48:57 PM
From: The Vet	Read Replies (1) \| Respond to of 81908

Searle your statement "It goes without saying that a fall in interest rates in the presence of a strengthening dollar is a very positive sign --- and very bad for gold." puzzles me. I always believed that low interest rates were positive for gold because the relative carrying cost of gold (which pays no interest, or very little) was higher than bonds and T-bills etc. in a high interest environment. As the interest rate of those instruments drop their advantage (measured as the return on capital invested) diminishes. A strengthening dollar tends to be gold unfriendly in USD terms only because gold is denominated in dollars. The strengthening dollar actually is positive for the gold price in all other currencies that must logically fall as the dollar rises. There is a great tendency to confuse readers as to cause and effect in these areas simply because there is no fixed base measurement which can be used to judge what is up and what is down. All is relative dependant on the viewpoint of the observer.....

To: sea_urchin who wrote (20307)	3/5/2004 7:09:52 PM
From: The Vet	Read Replies (2) \| Respond to of 81908

Searle, it seems that the rise in the US dollar may have hit a speed bump. If it wasn't for serious BOJ intervention on the Yen/USD rate the USD would have had a much worse day than it did. Here is an interesting comment from a Barrons article on Inflation and the markets ... "We'll leave the rest of the analysis to the reader, as rising interest rates in the magnitude implied by the chart (a full percentage point vs. just a fraction), would pose a problem for all financial assets. And by default, they would be good for hard assets like precious metals and real estate." online.wsj.com