from Freemarketman Blog & Bullionvault’s Adrian Ash

YOU CAN, IF YOU WISH, link the historic surge in Gold Prices starting mid-August 2007 to many seemingly disparate things.

Pick the right link, and you might be able to tell whether it’s worth your Buying today.

One such link is the price of money, as decided by the US Federal Reserve. Gold’s stellar 58% gain in the seven months starting 17th August began with the Fed’s first change to US interest rates in 18 months.

Last August’s 0.25% cut to the Fed’s “discount rate” – the interest rate it charges commercial banks to borrow short-term funds – was the Fed’s first interest-rate cut since July 2003. By the end of March 2008, it became a 3.0% cut to the bank’s key Fed Funds target.

And gold’s initial jump turned into a pole vault…

Read more..