There is a great deal of anticipation for the upcoming speech by George W. Bush on the eve of the Iraq War, and the Dow Jones Gold Index is already taking the bull by the horns and is anticipating a huge rebound in gold prices. However, there are a number of factors that will influence gold prices including the political climate in Europe, what China will do regarding its currency exchange rates, and what Powell Jackson is going to say.
The political climate will affect gold prices, as it will influence everything else that the world economy is dealing with. Will the new president of Argentina, Cristina Kirchner, who has been accused of corruption, be impeached? Will President Hugo Chavez of Venezuela has come to power?
Will a European banking crisis led to a rebound in gold prices, as many analysts predict? Will China suddenly take a stand against its overvalued currency and make some big moves, or will it hold its ground and continue with their plans to reduce the value of their currency?
Will there be a big reaction in the gold markets when President Bush gives his speech or will gold prices simply bounce back after this announcement, as many analysts expect? Or will there be a complete collapse and a significant drop in gold prices, as many people fear is going to occur?
Many people are speculating about which way the gold prices will rebound, and some are predicting a big rebound. However, if the political environment worsens, there is a big possibility that the Dow may lose a large chunk of its value. Many analysts believe that China has decided to take a step back and allow time for things to stabilize, and it is possible that the Chinese government will allow the exchange rate to remain low.
If the political turmoil in Europe is severe, then there will be a big spike in gold prices, but if the instability in Europe is not as bad, then there is a chance that the price of gold could drop. As previously stated, gold tends to act like a barometer of economic confidence, so if investors are feeling good about their economy, then the prices of gold will likely increase. If the economy is not so good, however, then gold prices will decrease.
How does the political climate in Europe affect gold prices, and is there a chance that it will cause the price to rise or fall? Will it affect the bond market, which is very important for the future of the global economy? Will it cause a recession or will this political turmoil cause a temporary depression, or will investors sell the bonds and pull money out of the stock market?
Will the political backdrop affect the gold price, or will the economic backdrop affect the gold price? Will it cause a big increase or will it cause a drop, or will the political backdrop have no bearing on the price? Will it cause a big rebound or will it cause a big drop, or will it just continue to rise until it falls again?