February Capacity Utilization Indicating A Drop In Gold Prices

By Katchum:

In my previous post about capacity utilization rates (which can be found here), I warned about a peak in capacity utilization. On 16 March 2012, the capacity utilization was released to be 78.7%, down from 78.8%. Although a minor decrease, it is the first time in two years that the capacity utilization dropped (chart 1).

When capacity utilization drops, we can expect cooling inflation rates. This creates an unfavorable environment for precious metals.

Click to enlarge

Chart 1: Capacity Utilization Rate U.S.

While looking at the technicals in gold prices (chart 2), the blue line (60-day moving average) is crossing the green line (200-day moving average). This cross


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