Dow Jones has lost 2,443 points since Obama was elected - a 25% decline!!

[Hoonose]

Originally Posted by LordBalfor

Yup.
Most goldbugs are really pretty clueless and are making investment decisions based on emotion rather than logic or even common sense. As I've said on this board many times - I saw that same "the dollar is doomed" goldbug mentality bring those investors a whole lot of grief last time "the dollar is doomed" mania swept the country - and it was wasn't pretty. Gold is a long way from it's bottom and really has no where to go but down at this stage because the QE will end, the economic recovery will continue and the dollar will not collapse. ALL of that is really bad for gold.

Will stocks take a bit of a hit when QE ends?
Yeah, probably - afterall, they've had a HUGE run so a correction of some degree is likely anyway - all that's needed is an "excuse" - and the ending of QE is a good "excuse", but it will be just an "excuse", and the correction will not be excessive and will certainly not erase anywhere near the massive gains of the past few years.

Without the QE "boogyman" - and with virtually no inflation either present or anywhere on the horizon - gold will likely find there is not much reason for buying it anymore - which will likely mean a further leg downward. I've been saying this for quite a while now, and so far gold has indeed been trending down.

Ken

I agree with you, except there are some bright spots with gold on the demand side. China and India. India by its culture, and they are growing. And China by culture and because of their capital controls. How much this offsets the downward pressure, I do not know. I always keep some gold or related, but only a small percentage today.

[LordBalfor]

Originally Posted by Hoonose

I agree with you, except there are some bright spots with gold on the demand side. China and India. India by its culture, and they are growing. And China by culture and because of their capital controls. How much this offsets the downward pressure, I do not know. I always keep some gold or related, but only a small percentage today.

It is true that both those economies are growing, but the current gold price is not based "consumption" of gold, but rather on "speculation" (specifically - an expectation of high inflation (which is NOT going to happen) and an expectation that QE will somehow lead to the collapse of the US dollar).
Remove the "speculation" investors and rely simply on the "consumption" of gold - and there is NO WAY the present gold price is sustainable - hence the ongoing collapse in gold over the last couple of years.

To me it's a no brainer that gold will fall to $1100/ounce (and possibly a LOT lower) and STAY THERE for years (maybe a decade or more) to come.

Ken