The way global equity markets rallied on the announcement that eurozone leaders had agreed a deal to resolve their debt crisis, and the news that the US economy had a decent quarter, you would be forgiven for thinking that the world’s problems were solved.
Gold investors however had a different view. Instead of selling their gold – as you would expect it they no longer needed it as portfolio insurance – investors wisely continued to stock up on the yellow metal.
The reality is the equity markets got it wrong. The bailout won’t solve Europe’s problems and the debt problems in the US are just as bad, if not worse.