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<p>[QUOTE=&quot;Cloudsweeper99, post: 1099074, member: 3011&quot;]A couple of thoughts...</p><p><br /></p><p>Interest rates might rise because of (1) a strengthening economy, (2) fear of inflation, (3) the Fed&#039;s attempt to manage currency flows, or (4) rising expectation of default.</p><p><br /></p><p>Gold tends to rise when real [inflation adjusted] interest rates go down.&nbsp; So gold might drop as rates rise if (1) inflation expectations exceed the rise in ratesj, or (2) the rise in rates is connected to an increased expectation of default, making gold a safe haven.&nbsp; And gold might drop as rates fall if (1) the market expects deflation, (2) gold is sold to buy long term bonds for capital appreciation.</p><p><br /></p><p>So changes in interest rates and gold prices tell you nothing about what is in the mind of the folks doing the buying and selling.&nbsp; Keep that in mind the next time you read an article associating a rise/fall in gold with a rise/fall in interest rates.&nbsp; It isn&#039;t easy to figure out what the market knows or why it does what it does.&nbsp; There are more opinions than facts out there.[/QUOTE]</p><p><br /></p>

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