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Two questions on gold
Could someone please answer these questions for me. Both are taken from last weeks' Economist article "Buttonwood, Snug as a Bug"
1.) Every time the Federal Reserve cuts interest rates, the opportunity cost of gold is reduced. Why? 2.) When spot prices are higher than forward prices (a market condition known as backwardization) that is normally a sign that users are desperate to get hold of a commodity and are willing to pay a premium for immediate delivery. Why? Thanks |
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