U.S. Federal Reserve Chairman Alan Greenspan's clout extends not just to U.S. equities. He also appears to hold the price of gold in the palm of his hand.
If Greenspan can deftly rein in the runaway U.S. economy, slowing it enough to quell inflation but not too much that it sends stocks plunging, a major rally in gold prices seems unlikely this year.
In past times of political or economic uncertainty, gold almost always drew a significant amount of speculative funds, which naturally drove prices higher. However, since the fall of the Berlin Wall in 1989 and the end of the Cold War, gold seems to have lost its appeal as a speculative investment in times of trouble.