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<p>[QUOTE=&quot;InfleXion, post: 2235030, member: 29012&quot;]This poster is all over Kittenco too. That being said, point #1 has support for reasons not touched upon, which is because:</p><p><br /></p><p><a href="http://www.mineweb.com/news/gold/the-weekend-read-why-a-fed-rate-hike-could-be-good-for-gold/" target="_blank" class="externalLink ProxyLink" data-proxy-href="http://www.mineweb.com/news/gold/the-weekend-read-why-a-fed-rate-hike-could-be-good-for-gold/" rel="nofollow">http://www.mineweb.com/news/gold/the-weekend-read-why-a-fed-rate-hike-could-be-good-for-gold/</a></p><p><br /></p><p><br /></p><p>To further expound upon this line of thinking, raising interest rates makes all outstanding debt more expensive to hold. That amounts to positions needing to be sold to offset the added cost. It is the same effect as increasing margin requirements: more dollars are needed to maintain the position.</p><p><br /></p><p>Because the managed money is now net short, that means any liquidation they need to do to cover the added costs of an interest rate hike would amount to reducing their short position if they need to get out of the gold market. Reducing a short position removes downward price pressure from the market, thus allowing the price to rise.[/QUOTE]</p><p><br /></p>

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