Despite the justifiable lack of confidence, recent price behavior to the record high of $1,897 early last week might give any gold bull pause. Even if prices recover from the subsequent selloff, chances are that further peaks will be short-lived. Look for prices to remain in a holding pattern at best, with the next major move probably favoring the bears.
your basis is on technicals...which in this market is meaningless. its interesting to see what the bears are talking about / it increases the depth of being bullish because their arguments are unfounded. thank you bears for your lack of having a plausible explanation for the direction of gold.
It is not surprising to see many bearish articles on gold.
90% of the financial managers are bearish on gold, and have bought the official government version that there is little or no inflation. And gold constitutes less than half a percent of worldwide investment portfolios.
And with respected people like Buffet calling gold useless, and a barbaric relic, most of the herd follows that mantra and practices it.
The realization among the investing public that inflation is a lot higher than officially stated, and is here to stay and will increase; will lead investors to flock into commodities in an exponential fashion.
Basically, when there is hyper-printing of currency (most currencies today are printing wildly), commodities go up not because commodities suddenly gain value. It is a flee-the-devaluating-currency event rather than commodities-are-suddenly-very-valuable event.
The effect is the same - commodities going parabolic in value. Some countries that are in an 'out of control debt trap' end up printing more currency to be able to meet interest obligations on their debt.
The hockey stick phase can start anytime. Governments, especially today(today, unlike 100 years ago, there is 'advanced statistics', easy propaganda through a powerful media), have a lot of tools to prolong that event. But the longer they prolong it, the more exponential the event is when it finally enters its final phase.
The end result is of course a new currency backed by restraint, discipline and austerity by the spending decision makers in government.