The global stock market rout of the past week was sparked by concerns over a possible interest rate rise by the U.S. Federal Reserve and not by the devaluation of China's yuan currency, a senior Chinese central bank official told Reuters on Thursday.
U.S. industrial production unexpectedly fell in May as manufacturing and mining activity remained weak, a sign that a strong dollar and spending cuts in the energy sector continued to constrain economic growth.
The performance of gold obviously depends on the U.S. economic condition and the Fed’s future actions. In the short run, the end of QE3 will most likely not change anything and gold will most likely decline on a dollar rally.
Most people simply cannot conceive of a U.S. dollar hyperinflation any more than a current resident of San Francisco could imagine a 1906 or 1989 earthquake. Many simply choose to not dwell on these potentialities.