The only way that gold will fall is if we have a general commodity collapse.
That could happen.
But the US is facing a total disaster on wheat production this year. The cattle herds have been sold off in huge numbers because of the drought in the Southwest and at some point as rain returns beef prices will spike.
Gold? You cannot eat it. Wheat & cattle you can if you can afford it.
I am always wary of “advisers” who refer to “right wing fanatics”.
The only reason he gave that is even real is that real interest rates are rising. “Gov’ts with debt issues are selling gold”; not sure where he’s going with that one, I always thought that whoever ends up with the most gold wins.
The price of paper gold may be pushed down, but there is now a disconnect between that and physical gold.
2. Gold does well during periods when there's a risk of high inflation. That clearly is no longer a big worry, given how much central banks have unsuccessfully tried to stoke even modest inflation.
"Inflation is NOT rising prices. It is the increase in the supply of money. The Fed is creating $85 billion a month. That's inflation on an unprecedented scale."
3. Now with the economy recovering, nobody wants to be in rocks that don't pay any dividends.
"Ah, what recovery? Is he talking US or Europe or world? Europe unemployment has hit new peaks. In the US graduates can't find any jobs. And can you believe government stats?"
4. Real interest rates are rising. That kills gold. Governments with debt issues are selling gold.
"Maybe all that thin air money is finally hitting the real economy, that you need higher returns to make up for losses due to inflation."
5. Gold was juiced by right-wing fanatics in the US. That boom is over.
"Hmmm, I didn't realize Central Banks were American and right wing fanatics to boot. How about those Indians, Chinese and Arabs buying gold?"
This and most other economic predictions will prove to be wrong and no one will remember.
Here’s one. Only this one is right. The ruling elite will give itself more dollars to compensate for their reduced buying power.
“* Gold was juiced by right-wing fanatics in the US. That boom is over. “
Says a left-wing extremist. There isn’t enough people with money in the US to have pushed gold to the price it is today. Governments the world over are buying and have been buying. They know the extreme left-wing policies the socialist States have adopted are going to crash the world’s economies.
I have no diea whether gold is heading up or down, but I find it amazing that a guy makes 50 outrageous predictions in any given month, and people still listen to him because he was sort of right once.
All right! I’m dumping my PMs and going all-in on the Dow! Happy days are here again!
Roubini is always an excellent counter-indicator. I was concerned about my physical precious metals investment until I read this.
Okay, something must be wrong with me, because when I read what that ex-spurt says, I read 6 reasons to BUY gold...asap. Maybe with dollar cost averaging approach starting NOW.
Goldbug Ping.