Follow by Email

Thursday, February 21, 2013

It Only Takes Two Charts To Explain Why Gold Is Collapsing $GLD

It Only Takes Two Charts To Explain Why Gold Is Collapsing $GLD #BusinessInsider

Gold has been falling, and as we just mentioned, it's about to enter a "death cross", which is a technical analysis term that means it's fallen hard, and people think it will fall more.
But while diagonal lines on a chart are fun, there are fundamental reasons why gold is declining.
It basically comes down to two things, that can be be expressed clearly in chart form.
The first is real interest rates. When real interest rates are extremely low or falling, that's good for gold. And there's an intuitive reason for that. Collapsing real interest rates mean you're not getting paid much for being in currency, and the real economy probably isn't offering that much either. So, why not be in gold?

 

No comments:

Post a Comment