“In financial circles, analysts credit the rising price of gold to an unlikely duo: investors seeking shelter and central bankers from India, Bangladesh and other developing countries. Both are wary of a falling dollar.
It starts with low interest rates. Central banks usually hold currencies from the world’s largest economies — dollars, pounds and yen — and then invest them in short-term bonds.
At the moment, interest rates in the United States and other developed countries are near record lows. Currencies tend to follow the path of interest rates, so not only do central banks get little return from buying dollars, they face the prospect of the dollar falling even further.” Read more.
“Rising Gold Prices Affect Local Companies”
David Montgomery
Rapid City Journal, September 26, 2010.
Image by Salvatore Vuono / FreeDigitalPhotos.net.
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