The Most Important Indicator For Gold/Silver Action
As gold prepares to assault the $1500 level and silver passes $40 in the dust, most people who follow the game are asking themselves, what next? Is it too late to get in? How do we know what to do?
Lots of indicators get thrown around. Middle east instability, Europe debt, Japan tsunamis, oil prices, food prices, interest rates, etc.
The number one indicator on what will happen with gold and silver prices are real interest rates.
By real interest rates, I mean the return on money after inflation. Currently, we have negative real interest rates.
As long as real interest rates are negative, gold and silver will perform. Why? Very simple. Capital flows to more attractive areas, and gold/silver is viewed as an alternative to cash because of its historical monetary characteristics.
So, as long as real interest rates are negative, gold and silver will shine.