It obvious that the price of gold depends heavily on U.S. economic conditions and the direction of the Federal Reserve. In other words, when the Fed has cred, gold is dead. But does the end of Qualitative Easing necessarily signal a doomsday for the yellow metal?
Not necessarily.
Hard Assets says investors should not take the end of QE too seriously, saying that “even if the Fed increases interest rates, the result will not necessarily be negative for the yellow metal.”
Gold: The Ultimate Debt-Killer
Professor Antal E. Fekete, a professor of mathematics and statistics at Memorial University, recently talked with EveryInvestor.co.uk about gold and the negative impact of Quantitative Easing (money printing), remarking that:
“You can praise the dollar to heaven, you can praise the euro to heaven or the pound to heaven, dance around it and have all kinds of celebrations saying that we have arrived at the new Millennium when the governments can print as much as they like, and there is QE and zero interest rate policy. It will not change the fact that none of these are ‘ultimate extinguishers of debt’. Whether you like it or not, only gold – and in the second place silver – could discharge that function.”
Photo courtesy of Resource Investor