There we go again

In a message dated April 10, 2008 (“Gold/US$/Commodities” Cycle), I explained the cycle in the price of gold, the US $ and commodities. In another message (March 22, 2008: Rates and commodities), I warned of the danger of a diverging trend between commodities prices and interest rates. In today's FT’s article "Central banks increase gold lending", one can read that banks are borrowing gold (ndlr: in the hope the price will fall) and swapping it against dollars (ndlr: which they expect to rise). The cycle “Gold/US$/Commodities” is still operational. Furthermore, a clear peak in commodities prices (a sign of inflationary pressure) in 2011 is again lagging the falling trend in interest rates:As in 2008, this is not good news for the stock market.

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