explanation of the price of gold as an economic indicator

Solution Preview

Hi there,

I will do my best to be of assistance to you.

The prices of gold and industrial metals are rising because the Federal Reserve is sending needed cash into the economy. Gold and metals, of course, are key monetary and economic indicators, and their current surge confirms that the long, dark night of deflation has come to an end.

As long as the Federal Reserve keeps pumping the economy with sufficient new cash to boost investing, spending, and saving, it looks like we're set for something of an economic boom next year.

Another good guess is that commodity markets, which include gold and metals, are surging in anticipation of a rising growth of money in the European, (non-Japan) Asian, and U.S. economies. Good technology news is coming out of Asia, suggesting economic recovery is on track in ...