Gold and the Euro

graeme at 8:16 a.m. Mon 22 Feb 2010

AdvisorAnalyst has an interesting post on the relationship between gold, the dollar and (more recently) the euro.

The article concentrates on last months strong inverse correlation between gold and euro rates. However, how much can be read into a single months data is questionable.

Equally interesting is the wide divergence in opinion over what gold is worth: ranging from $700 to $1,400.

Perhaps we should pay special attention to the views of people with exceptional track record. George Soros:

When interest rates are low we have conditions for asset bubbles to develop, and they are developing at the moment. The ultimate asset bubble is gold.

and, according to Advisor Analyst:

Nouriel Roubini, economics professor at the Stern School of Business, New York University, says that there is a bubble in commodities, and that the price of gold should be no higher than $1,000 an ounce given the current market conditions

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