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<p>[QUOTE=&quot;Aberlight, post: 306632, member: 6510&quot;]Oil is in US dollars. As interest rates fall the value of the Dollar falls increasing price of oil for us since we are buying in US dollars, gets cheaper abroad. When the fed lowers fed funds from 4.25 to 3.5 as expected over the next year the dollar will likely fall as the world market looks for alternative debt to invests in pushing oil up based on the US dollar value, gold goes up.</p><p><br /></p><p>Lower rates = less foreign demand for USD = Higher price of oil = inflation = gold prices increase.</p><p><br /></p><p>Core CPI YOY was announced today and higher fuel cost have started to affect cost of goods, known as inflation.</p><p><br /></p><p>Platinum is industrial and trades based on (world) economic growth unlike gold which adheres to years old tradition of inflation hedge.</p><p><br /></p><p>In short Gold and Platinum don&#039;t always trade in relation to each other.</p><p><br /></p><p>Gold may go higher, may not, but economies are cyclical and some day despite gold going up it will come down. 2 years, 5 years, 10 years...I don&#039;t know. Many people that bought gold in the early 80&#039;s with the doom and gloom scenario of the day are now just breaking even dollar for dollar. Factor in inflation they are behind. People that buy today may do well in a year or two, or they may need to hold in for 20 more years. Gold doesn&#039;t pay dividends. Its a hedge, an instrument to offset in a counterbalance to another security.</p><p><br /></p><p>Before anyone tries jumping on me please not I am talking about raw gold bullion and not ultra rare gold coins.[/QUOTE]</p><p><br /></p>

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