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Gold/Mining/Energy : Precious and Base Metal Investing -- Ignore unavailable to you. Want to Upgrade?

To: LLCF who wrote (33434)	12/15/2004 1:54:07 AM
From: Valuepro	Read Replies (1) \| Respond to of 39344

DAK, "...rate hikes expected as far as the eye can see, ...Gold to dump big time and for a lengthy period." Huh? Rising interest rates, per se, do not kill a gold bull market. Gold advances with the divergence between real and nominal rates. Rates can rise without the spread narrowing. In other words, lending rate increases in the early days of a cycle like this really are an excuse for banks to increase returns as inflation rises. However, the process is usually presented as a means to "control/supress" inflation. That actually comes later, when the spread narrows. Note that Tuesday was the fifth time in just a few months that rates went up. Yet, during this period gold set and remains near a high not seen in a generation+. This bull is only getting started.