http://www.bloomberg.com/apps/news?pid=20601087&sid=aIK37pL9LscY&refer=worldwide
The idea here is that a cut in the Fed Funds Rate will be inflationary. This has an effect on commodity prices such as gold and oil. The Dollar (USD) may loose value in terms of gold and oil.
Various foreign currencies may gain against the Dollar only to be devalued later to stay competitive, while gold and oil could rise in value in terms of many currencies.
Also note that as I have said before, the Fed may not cut at this meeting (18 Sept. 07). I feel strongly that they will start to cut as the housing/credit bubble deflates. Their worst fear is deflation and they will inject (print) money to counter deflation. If this happens, gold should go higher. How high? This depends on how bad things get.
zen
Disclaimer: This blog is not a substitute for an investment adviser and is not to be taken as investment advice. You are fully responsible for your investment decisions. Please find a qualified investment adviser.
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