Reply #33: Prudent Squirrel: What is happening with Gold? [View All]

http://www.kitco.com/ind/Laird/may302007.html

Gold and the HUI have been trending down. I hear various reasons proffered about why – central banks are selling – that is why gold is down – etc. Indeed, the Spanish central bank has sold 80 tons of gold in the last two months because they are seriously low on foreign reserves. That is another story.

But, I see very good macroeconomic reasons for gold to be tepid and down now. In fact, things like what the USD does are far more weighty to gold, than temporal central bank selling of gold. True, 40 tons is a lot, but compared to the financial mass of the USD for instance, that is literally a drop in the bucket.

One major force driving gold down now is that the USD has begun a short term strengthening trend. I have written about this to subscribers for three or more weeks now.

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