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Thread: Bank of America / Merrill Lynch Recent Gold Video

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    Default Re: Bank of America / Merrill Lynch Recent Gold Video

    She is a technician, so, as EJ puts it, one of the people that looks at made up "levels" and numbers that determine where and when the next major move in a given investment will be. Other market participants look at these same levels and make similar decisions, thus reinforcing the theory. The $1,200 level, from what I've heard, appears to be the next major "level of support" according to the charts.

    Interest rates affect holding gold and other non interest bearing investments based on opportunity cost. Today, an investor can hold an ounce of gold or $1,450 in cash and more or less receive the same amount of income ... 0. As rates rise, it becomes more costly to hold gold in that the investor is foregoing interest he or she could have earned if they held a CD or other type of time deposit. Additionally, as EJ has pointed out in past articles, gold has both gone up and down in periods of both rising and falling interest rates. The same goes for inflation ... inflation in the late 80's and 90's certainly existed, and yet gold prices remained more or less stagnant. From what I remember, his conclusion on the major driver of gold prices long term continues to be global confidence in the main default currency (the dollar) and indirectly, oil prices. Inflation was also a driver of gold prices, however, gold tends to perform the best in periods of "high" inflation or higher than normal inflation; take the late 70's and the 2007 thru middle of 2008 time periods.

    Yes, Merrill, used to be it's own company. As far as I'm concerned, this doesn't seem to have affected their research one way or the other. They have the same goal as most of the other brokerage firms on the street ... earn profits on increased investor activity or encourage fee based investing.
    Last edited by phinolerun; 04-27-13 at 01:53 PM.

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