Just thinking of what is going on, and there are several possibilities or combinations thereof, which when taken in their entirety, means I haven't got a clue, and I doubt if anyone else has. The gold stock sell off has been viscous.
1. Gold has lost its claim of quality. If everything else is going to hell, including gold, obviously no one sees gold as a safe haven.
2. The big boys, hedge funds, etc. are liquidating their gold stocks alongside all others just to get out of the market and raise cash..... U.S. dollars. If you want quality, go to cash.
3. The weak stock prices precede the price of gold. The POG lags the stock action.
4. Stocks were simply oversold. The big run up to $1000 or $10,000/oz just won't materialize.
5. It is all a vast conspiracy. (my favorite for lack of knowing anything else)
6. Momentum players, weak hands, program selling of stocks (related to point #2)
7. Unlimited faith in the U.S. dollar. It cannot ever fail. (see point #1) This in spite of the obvious weakness in the equity markets, fiscal and monetary problems, debt and deficits.
WHEN VIEWED IN THESE TERMS, IT SURE DOESN'T LOOK ENCOURAGING FOR GOLD. or for any other market. |
