Flat out speculation. If you are long gold, then you are saying that the 10 year treasury rate will decline. From what I see, the 10 year rate will rise to 3.5% by the end of the year. The only reason gold is higher is because US 10 years have traded from 3.03 to 2.6 over the past month. This isn't going to last, hence this rally in gold isn't going to last.
Everyone thinks QE lowers bond rates, but the evidence is pretty obviously the opposite: every episode of QE has seen rising rates, and every time they pull back, rates have fallen. Anyway, I'm bullish gold now, along with every other commodity. Gold less so, as it is probably still digesting its fall from last year. But I'm starting to get in for the long term with the miners, whose rise will precede that of gold anyway, if we're setting up for another run. For commodities in general, you can look at almost any chart and see a pattern of lower prices AND (this is the important part) lower volatility. The latter means expectations are now very low for commodity prices. That's a very good thing. Attached is a 10 year chart of the Dow Jones Commodity Index. Besides that, check out palladium, an extreme case of dropping volatility, and any of the non-ferrous metals' five year charts in the two below links (the 2nd link to the non-ferrous metals takes you to zinc, but you can find any of the others in the sidebar on the left): http://www.kitco.com/charts/techcharts_palladium.html http://www.kitcometals.com/charts/zinc_historical.html
QE is gasoline to fire the economy up. Interest rates are a measure of the speed of the economy. So now that QE is publicly being pulled, the speed of the economy will slow. Interest rates will slide as they have given evidence past few weeks. They may even break through historical support.
after friday's action, I am very bullish gold, but my time horizon is swing trader, so no definite predictions for the whole year: for the next couple weeks, or so, up
This is pure lunacy. Do you even trade here? You should go back to the politics and religion section.
/facepalm QE lowers rates. Tapering hikes rates. What world do you live in? You can't place gold with other commodities. Gold is its own beast.
Bond rally has lasted over 30 years. Who's to say it won't last another five years or ten years? If we switch to a regime of rising rates, it will be a massive change in the markets. Low yields on British gilts lasted from Napoleon to WWI. Japanese bond yields are probably seriously negative at this point. Massive secular trends like the bond rally don't end when everyone agrees it should.