phillips49

Has Gold Fallen in a Secular Bear Trend?

Let us not forget that gold traded pretty flat for the 22 year period from 1982 to 2004, regardless of inflation, economies and currency exchange rates. The creation of gold ETF's in late 2004 really created an artifical market for gold where everyman could participate without taking physical possession. Click I'm, click I'm out. This in itself drove gold prices up by creating new demand. Check the charts yourself. Soooooo, if everyman decides to head for the hills and stash his cash, gold will collaspe as the ETF's sell off their holdings. Investors have been bailing out of all asset classes due lack of confidence and fear. Since everything is only worth what someone else will pay for it, we really depend on the guy next to us to hold or buy to preserve our own investment. If he gets scared and pulls out, then the value of what we hold falls until we get scared and pull the plug as well. The last one out the door is left holding the bag.