As long as the trends that have caused this year's bloodbath continue, I won't be surprised to see $1200 gold this summer. It all is correlating nicely with the "hard" data coming out and the (non) reality of QE effects (so far).
1. No inflation and no inflation expectations based on TIPS breakevens, low and steady velocity of money and an essential failure of fed money to circulate. other arcane metrics also show low inflation.
2. No need for a doomsday/fear hedge like PMs because of "U.S. housing recovery" and and a sporadically improving jobs picture.
3. Dollar is roaring against other currencies and commodities are being crushed as China is stuck with inflation anxiety and can't ease, whereas Japan is doing so with abandon and whether they like it or not, the eurozone may be forced to ease.
4. Fears of Cypress selling gold reserves persist and the GLD (numer 4 or 5 largest holder of gold in the world) is experiencing outflows as price drops.
5. Why mess with this loser sector when you can make money just about anywhere in the stock market past 4 months ?
6. Poor industrial demand out of China, weak manufacturing numbers add pain to the silver story.
If and when these trends reverse the metals may catch a break. The "QE taper" talk we are hearing will be the great experiment I anxiously await. Brave individuals who think the world's money printing and currency debasement will ultimately come home to roost have a historic buying opp right now.
It is really tough to watch. The dollar keeps going up and silver keeps getting crushed. Been hearing for months it will be over soon but it sure does not appear that way. Its almost like we need to fed to quite pumping.