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:
https://www.economicgreenfield.com/2009/09/04/gold-and-implications/
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
True enough gold didn’t fare well fall 2008, but I don’t take that as reflecing poorly on it’s near- to mid- term outlook. People fled into cash as their ‘haven’, but this was a move based on ignorance and panic. They had to put their $ somewhere fast, so they did what was easy. But obviously gold has been a far better place to be than cash or equities over the past 8 years, and as more people become aware of that, gold will become one of the preferred havens, IMO.
A LOT of fundamentals favor gold right now–central banks are buying gold; the Chinese gov’t is urging its citizens to put savings into gold; political turmoil; the supply demand equation; the shaky status of the dollar.
Finally there are a lot of very savvy investors out there who argue gold is going to go up. Jim Sinclair (jsmineset.com), Martin Armstrong, Alf Fields, Jim Rogers, Marc Faber. They might be doing this out of self-interest, but I don’t buy that argument.
I enjoyed your TA of why the equities market is about to turn, thanks!