The US Fed’s interest rate cut has given Gold a value shine in the eyes of investors.Gold bullion investments do not pay interest and in today investment climate look pretty good when compared to US T Bills, which also are paying zero interest now. The spot price of gold has climbed above $870 an ounce on the New York Mercantile Exchange, up about 20% from its October 2008 lows.The world’s currency markets reaction to the US Fed’s recent interest rate cuts started a rally in Gold, as investors weigh the benefits of owning the Yellow Metal vs. U.S. Treasuries and the US$. It is unlikely that the world’s central bankers will stop stimulating their economies by printing money and doing whatever it takes to restore growth and confidence, no matter if that policy causes rampant inflation. . With that in mind, do not expect this rally in Gold to be a short one because the Demand/Supply fundamentals in the market hold the promise of more gains ahead.
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