Gold points to repeat of summer 2008

Last Tuesday (July 27) we began the debate over whether the current market environment is more reminiscent of the summer of 2007 or of 2008. As we noted, despite the mounting problems within the US housing market, sharply easier monetary policy settings in the second half of 2007 fed directly into sharp rallies in commodity prices, relative stability in the equity markets, declining long-term yields and a fresh slide in the US dollar. In contrast, the summer of 2008 saw the commodity price rally