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Will High Interest Rates Kill the Bull Run in Gold?
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Wednesday, 07 May 2008
By Charles Delvalle
When the Federal Reserve hinted at the possibility of higher interest rates in the near future, gold dropped $50.  But will higher interest rates in the future signal an end to the bull-run for gold?

For that answer, let’s look at the last time interest rates were going higher – from July of 2004 to July of 2007. In those three years, the Fed Funds rate rose from one percent to five and a quarter percent.



During that same time frame, the price of gold went from $400 an ounce to a peak of $730 an ounce by May 2006. By the time the Fed stopped hiking rates, an ounce of gold was sitting at nearly $660 an ounce – an increase of 65%.



As you can see, when there’s a long bull run pushing the price of gold, it doesn’t matter if interest rates are increasing or decreasing, the price of gold should shoot higher.



With inflation and government spending out of control, we should see much higher gold prices in the next 12 months.



That makes today a perfect time to begin acquiring gold at a significant discount.



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