Gold's Prospect Still Depends on US' Rate and Inflation Outlook

Gold price slides to 1103 in European session as investors take profit after the 3-day rebound.

The outlook for gold price depends heavily on US inflation and interest rates. Fed funds futures yesterday showed a 60% probability (around 36% in November) that the Fed will hike hikes by at least 0.25% by 2H10.

While the market has rigorously speculated the Fed will raise the policy rate earlier than previously expected, the Fed and analysts in the street remain cautious and forecast the Fed funds rate will stay unchanged at 0-0.2% for most of the time in 2010.

Source:
http://www.oilngold.com

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