Rising U.S. Interest Rates

As U.S. interest rates rise and the dollar gains strength then the price of
gold should drop.

Today was the first federal banking system interest rate increase in several
years. The rate increase was so small compared to the total amount of
previous interest rate reduction that both treasury securities and gold rose
in price. However, gold was off its highs.

So there are two likely scenarios:

One is that there will be regular small interest rates increases in step
with an economy that expands for two years or more. And the other is that
there will be regular small interest rate increases in step with an economy
that tops out in a year or less...

So to buy or sell gold I would predict the price of gold one year from now
and two years from now and plan logistics based on that. This of course
applies to someone who does not profit from a buy-sell spread.

Another fundamental to consider is the demand of commodities from China.
China is predicted to flatten out its economy a little. Of course China
demand pushed up the price of copper and steel by larger percentages than
for gold or silver.

Of course a commodity broker can place an investor in a 100 ounce gold call
or put option or in futures.

Or someone with 100 ounces of gold in a bullion bank can write call options
on the gold and produce income. Of course the call premium income might be
less than the downside of the price of gold.

Downside of the price of gold ? Well, what does everyone think, is the price
of gold going down and if so how much in one year and in two years ?

I think gold will be $375 an ounce one year from now and $350 an ounce two
years from now...