Pat, I am honoured that you would ask my point of view, but I must tell you that my opinion carries no more authority than that of anyone else on this thread; my opinions are simply a distillation of all the various opinions that I read, combined with my limited experience. Having said that, the situation as I see it is as follows: market followers have more than a year now scrutinized every economic report for signs of inflation. So far, it has not materialized. Indeed, recent PPI and CPI reports have actually shown disinflation , if memory serves me correctly. There is no reason to believe that this Friday's PPI report will be any different. But this situation cannot last forever. Sooner or later, inflation will rear its head simply because that is always the way it has been in the past. And when it does, gold obviously will rebound. The lower gold is when that happens, the harder it will rebound.
Secondly, gold has been unattractive in light of the incredible run of the markets. But how long can that last? Again, not forever, and when it appears the markets are turning, again gold will rebound. Actually, likely before that, for is it not typical that gold rises in the late stages of a bull market?
I'm not counting on any catastrophe or world tension to move gold, because those are unpredictable. But obviously it could, as could any unforeseen events regarding EU currency union or announcements regarding a change of policy by one or more central banks regarding gold selling. It's interesting how these surprises tend to appear often right when the outlook is seemingly bleakest. Look at Japan's announcement a few weeks ago re. the selling of U.S. treasury bills.
Finally, when I think about gold's undoubted rebound, I think more of a target figure of around $375, simply because it seemed to hang around that level for longer than it was above $400.
And your opinions, please?
Respectfully, Mark A. Kubisz |
