This is how I see gold in the short term…

Some thoughts as our American friends return for their Presidents' Day holiday

There is a dawning realisation that the Fed can’t reduce interest rates in the near term and that the CPI inflation rate will not return to 2%. The problem for markets is they are heavily skewed into discounting a fall in interest rates. Even the sceptics argue that with government funding requirements remaining elevated, the Fed must reduce interest rates to avoid a debt crisis.

So what happens if the markets have got it wrong? And what happens to gold?