I wouldn't claim to know more than the analyst, but I don't agree with much of what they say.
You think there are fundamentals to gold pricing? I don't, it's all about fear of the unknown, take away the fear and replace it with certainty and gold will collapse.
Gold doesn't trade on supply/demand as it should, as most commodities should. I emphasize "should" as commodities should trade on supply/demand. But because our commodity markets are warped and corrupted, they trade on speculation.
First of all, money supply, who really knows what the money supply numbers are? Money supply in my estimate is similar to the UE and inflation numbers from the government. BS. The government has their own way of doing math, which serves their purposes.
I don't see how gold is money anymore than any other commodity. It's money because people believe it's money. If enough people believed that platinum was money, it could be money also. Please remember, gold is not in short supply. The world supply of silver is lower than gold. http://www.dnaindia.com/money/interview_...
Now if money supply is directly tied between the US dollar and the gold price, some assumptions don't compute. Gold is as speculative as any other commodity. If there is some direct price correlation between the dollar(money supply as they call it) and gold, then how can gold go up and down like the chart below during five days of trading?
Did the money supply move like that? I don't think so. Previous to the chart indicated, gold fell from over $1900 to $1710 in a week. Gold moves like any other commodity, speculation.
Next, how is it that gold did not change in value for more than 20 years from 1986 to 2006 even through the money supply grew?
Furthermore if what some analyst say is true, the long term US dollar should be inverse of the gold chart. However, there is little resemblance. The inverse of the US dollar chart much resembles the Euro dollar chart, not gold.
Some analyst argue that the gold price's are fixed, and that the US dollar is the asset that is changing. Perhaps, but if that is true, then it's also true for most currencies, not only the dollar.
Because the governments fear deflation more than inflation, therefore they print money.
However, eventually inflation or deflation will win out, but it will be borne out by how committed they are to devaluing the currency.
I find it interesting that the US dollar is low, but is not making new lows of late. The fed and treasury want the US dollar low, but it does not appear at this time that they want to kill the value (just yet anyway).
How can gold alone devalue the US dollar if nothing else is inflating? Oil is still 38% lower than three years ago. Homes are 35% less than 6 years ago. Some will argue that wages are going down. Correct me if I'm wrong, but right now we have less dollars chasing more goods, no?
While US debt is growing and appears out of control. The ECB will be printing money soon to support the insolvency issue, just as the US had to do. I maintain that the battle of currencies is against each other, not gold. However, gold has no doubt been the clear winner and beneficiary of the battle.
Eventually, everyone is going to come to the conclusion that the Fed's QE policy is essentially a means to raise asset prices. Seeing as how the rich have more assets, this is in essence giving money to the rich at the expense of the poor under a Democratic president's rule. Once people get that QE means higher food and energy prices, and more are getting this every day, the QE3 and 4 ETC will be off the table. Once the U.S. dollar buys more energy and food, there will be a move from gold back into dollars in the U.S. (estimate: 4-6 years)