Why did gold rally in the first place?
The first question that springs to mind when contemplating gold is what exactly are we buying? Essentially this precious metal is seen as the antireserve currency. It has found its place in the asset world’s pecking order by keeping fiat currencies on their toes. When we buy one currency versus another we are to a degree speculating on interest rate differentials and as a result, rates of inflation. This relationship has been quite pronounced, particularly since the end of 2008 when the whole quantitative easing experiment began.
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MIG Bank