oldgoldbug

Eric Lemieux: Decline in Gold Price Goes Against Every Theory

Gold goes from $250 to $1030 in 8 years, compounding at something like 18% per year. Gold corrects from $1030 to (?). At $1030 everyone who ever bought it has a nominal profit. Stock markets, oil and just about everything else except Treasuries crashes. Margin calls everywhere due to overleverage. Reasonable investors take profits in gold, speculators sell gold to meet margin calls in stocks and other commodities. Gold may go down a lot further from $715, maybe not.
More remarkable to my thinking is that gold hasn't gone down much much further and faster. Just look at the major miners (not to mention the juniors). The majors have lost up to 70% of their peak value. There are enormous deflationary pressures and gold is holding up as well as it has? The dollar is up 20% and you can't buy physical gold without paying massive premiums.

The real story is gold's strength, not its perceived weakness.

I would assume in a major deflation gold will drop back to where it started. Gold is telling us a major deflation is not likely.