The ECB dropped interest rates to 0.25% last night. No inflation is in sight as you can see from the following chart
So the Euro sank, the US dollar rose and gold broke below critical support as I expected it to. We are now on the way back to $1,250 for gold and then it is on to $1,180 and beyond.
The dollar rally should last another month or two and that gives us a time frame for a low in gold. Oil is down, inflation is down, money printing is not yet having an inflationary impact…
…but over in Japan things are warming up. Inflation expectations are rising steadily after a CPI jump of 0.8% in August. Abernomics is kicking in. This experiments is simply a little way in front of the rest of the world so it is only a matter of time before western governments follow japan and inflation follows from there.