Financial Musings: On Gold Prices and US Interest Rates

Wednesday, November 08, 2006

On Gold Prices and US Interest Rates

Published in Business Line on Nov 09, 2006

Conventional Economic theory tells us that US Interest Rates has a negative correlation with Gold Prices. But historcial data for the last 35-years indicated in the graph shows exactly the opposite trend.

The article explains what truly drives Gold prices over long periods in time. Also as I have explained in my previous articles, Interst rates are set to rise dramatically in the US and this is likely to increase Gold prices many times over in the next decade.

About Me

Name: Shanmuganathan N

Location: Chennai, India

Studied Engineering (BHU) and Management (IIM-L)in India. After the formal education, I took the "Road More Travelled" and worked in Infosys for 8 years. As a part of Infosys, I had the lively experience of Consulting with the dot-com companies. The irrational exuberance of those times convinced me of the absurdity of "Efficient Market Hypothesis". Thus began my second round of education -- this time at the virtual campus of Buffett and Mungerville. This was complemented by the teachings of Graham, Jim Rogers and then the Austrian School -- each step adding a new frontier to the fascinating world of Investing & Business. Then, as part of Infosys, I had the wonderful opportunity of Consulting with clients in more than 15 countries across a variety of Industries. Subsequently, started BENCHMARK ADVISORY SERVICES. We are an Economic Think-Tank and Consulting firm. We help our clients understand and adopt an appropriate Strategy to Megatrends & Economic forces that would shape the future of this world in the decades to come. You can visit us at http://www.benchmarkconsulting.in/

Financial Musings

Wednesday, November 08, 2006

On Gold Prices and US Interest Rates

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