Kitco News – After Monday’s global market rout, it left many market participants scratching their heads in wonder as to why gold didn’t perform better. Gold could not hold onto its six-week highs and the metal ended the U.S. day session solidly lower on Tuesday. December Comex gold was last down $16.90 at $1,136.70 an ounce. But Frank Holmes the CEO of U.S. Global Investors summed it up pretty simply, ‘gold is not always linear,’ he said in an interview with Kitco News. ‘Gold was in a rebound for two weeks, it almost acted as a forecast of what was going to happen in the markets on Monday,’ he said. Holmes added that he does think the love trade for gold has slowed down in China. The country announced new monetary policy stimulus measures Tuesday, including cutting its benchmark interest rate by 0.25% and lowering China banks’ reserve requirement ratios by 0.5%. ‘In the next three months, we’ll see big stimulus take action [in China],’ he said. Holmes added that the People’s Bank of China continues to buy gold and central banks globally are eyeing the metal.
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