With Gold now below $1000, I would like to call attention to a post of September 4 titled “Gold and Implications.” Here is the link:
I think that Gold below $1000, after having failed to hold above this level, is very significant.
Also significant is the number of people who have been predicting a Gold price considerably higher than $1000, many saying Gold will reach $2000 to $5000/oz.
I like Gold’s properties. However, I don’t believe that the economic factors now in existence support a strong Gold price, from an “all things considered” basis.
Gold’s price is particularly hard to predict, because there is always a “fear factor premium” that may assert itself. While this “fear factor premium” seems to have diminished over the last couple of decades, it can always reassert itself in times of panic. However, I think it was very significant that during the Financial Crisis of the second half of 2008 (especially July – October), Gold faired poorly, which in my mind does not bode well for Gold’s “fear factor premium” at least in the near term.
SPX at 1050.78 as this post is written