“The market is convinced that the dollar will go down after a Fed Funds interest rate cut.”
“There is little doubt that gold is now here to stay above $700 and the market is reflecting it.”
– Julian Phillips, Analyst, GoldForecaster.com
The most actively traded December Gold futures contract closed today on the New York Mercantile Exchange just below $724.
Its been quite a run for gold since the huge sell off of Thursday August 17. As you can see from this chart of front month gold futures contracts, gold has rallied about 10% since then.
I think gold might be due for a little pullback here if we get the anticipated 25 basis point cut tomorrow. But longer term, with the Fed having to fight the housing meltdown and the credit crunch the dollar should suffer and gold prosper.