Gold: Is Your Money Better Off in the Bank?

Indeed, it appears that the odds against a rise in gold prices are limited, if we are indeed on a trajectory towards a series of earlier-than-expected interest rate hikes in response to signs of a U.S. economic recovery. Many are convinced that the Fed could soon pull back on its easy-money lending, economic stimulus policies, which have kept interest rates at a near-zero.

Of course, wealthy hedge fund managers like John Paulson and David Einhorn may beg to disagree with these views, having recently jumped on the gold bandwagon and taken huge positions in a gold. Paulson is launching a gold-focused hedge fund in January. He's putting $250 million of his own money into it.

Gold mining stocks are up in early afternoon trading. Barrick Gold(ABX) stock has advanced 0.2% to $42.90, while rival Newmont Mining(NEM) has risen 0.8% to $52.80. Freeport McMoran Copper & Gold(FCX) has added 0.8% to $80.50 and Yamana Gold(AUY) has risen 0.1% to $13.

-- Reported by Andrea Tse in New York

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