wolfdog

The Bedrock Case for the Return of the Gold Bull

This is a very thoughtful article. I accept the basic premise that central banks (and the politicians) will inflate to prevent deflationary tendencies of massive credit liquidation. This shakeout in gold is healthy and part of an on going bull market in AU. And 2 points: 1/ As the year winds down, hedge funds who have been long commodities have locked in some gains in order to preserve their performance fee paydays - this has nothing to do w/ the major trend of the assets, it is just a short term supply/demand factor 2/ Gold is still very cheap relative to oil. Oil is not going back to $20 or $50 soon........maybe 15 years away but the lead times on alternative energy investments are too long. So since oil will remain relatively high in nominal dollar terms, gold will also.