[OPE] Real interest rates

WSJ Dec 29, 2010
Gold Set for Fresh Highs in 2011
Rhiannon Hoyle

(...) Goldman Sachs is also tipping 2012 as a turning point. "With the
current round of [quantitative easing] set to end in June, and our U.S.
economics team now forecasting strong growth in 2011 and 2012, we expect
U.S. real interest rates to begin to rise in 2011, likely causing gold
prices to peak near $1,750/oz in 2012," it said in a recent report.
http://online.wsj.com/article/SB10001424052970203525404576049621759066288.html?mod=WSJEUROPE_hpp_LEFTTopWhatNews

Not so sure of "strong growth" - US domestic final sales, fixed investment
and aggregate unemployment levels are justabout stagnant, and US export
growth is far from spectacular - but I think they are probably right about
the rates rise anyway. If there is really "strong growth" (it would have to
be something like 3% real US GDP growth or more), it would be more plausible
that gold prices would drop to some extent. We'll see how that story pans
out next year.

J.

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Received on Wed Dec 29 17:44:44 2010