Starting in mid to late August this year, Gold made a significant jump in price. Though there are a many obvious reasons that have been batted around as to why this was the case, analyst Victor Flores of HSBC Securities has his own take on the jump in Gold price:
Mr. Flores: There has been a fair amount of discussion about the reasons for that big move that gold made, starting in mid- to late August from the levels close to $650 up to almost $850 in a very short period of time. There has been a lot of discussion about the subprime issues and banks taking write-downs and a number of other things, but I see it very simply. I think it is really a reflection of the weakness in the dollar. The rise in the gold price pretty closely matches a rather dramatic fall in the dollar to new lows. Gold has just moved in tandem with that decline. To me, it really is very much a dollar-driven move.
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