4 reasons why I think Gold price will crash to $400 - $500 per ounce-: 1) "Worldwide central banks" who have invested Trillions of dollars in Gold, they will sell "Gold reserves" to earn cash/currency. http://elitetrader.com/vb/showthread.php?s=&threadid=147136 2) India is the biggest consumer of Gold in this world. There will a full-scale war between India and Pakistan within 2 months. Both of them have Nuclear weapons. 3) Worldwide people are poor because of "Mortgage, Banks and worthless-Giant companies Crisis". 4) Al-Qaeda has been silent for past 7 years. There is always a "great silence" before a massive storm (nature's rule). I think there will a massive terror attack on USA and Europe any time now. It will be bigger than 9/11 attacks.
Answers 1 - Plenty ofg buyers out there for the Central Bank gold. Plus, when central banks sell (usually by committe) the buyer usually gets a great price. 2 - All the more reason for Indians and Pakistanis to buy Gold. 3 - Gold for many people is not a luxury, it's an investment or at least a holder of value. It's also been one of the best performing assets over the last 18 months. This trend is unlikely to end anytime soon. 4 - Don't worry about AQ, they're nothing but a rag tag of dreamers who got big time lucky. Most of what we read about them is rubbish, the US needs them because it needs to scare its population. Anyway, even if there was a big blast I don't think people would instantly say 'sell my gold'. Overall you make very weak arguments.
Reason 5) Crude Oil will fall to $25 or less per barrel. No more money for Oil-rich gulf countries who are Gold-lovers.
Your logic is flawed. Look at history to find out the effects of things like wars on the value of paper currencies. When the soviets attacked Afgan it sent gold from $500 to $850 in a matter of days. Central banks are no longer willing to sell their gold for dollars. They have too many dollars as it is. In addition, interest rates are now zero. No more argument to hold dollars because they pay interest. They can't print metal, but they *ARE* printing lots of paper. Which will hold its value? "Paper is poverty" - Thomas Jefferson
#s 1-3 I can make a case for gold going down, but #4??? Man, gold would shoot through the roof if that happened. Gold thrives on fear.
When the soviets attacked Afghans, there was no threat of Nuclear bomb. India and Pakistan both have Nuclear bombs. Worldwide central banks are bankrupt themselves because Global financial crisis has forced "worldwide central banks" to invest $4 trillion - $6 trillion into "sinking world economy" and "loss-making giant companies and banks".
So how much actual gold do you think they have remaining that isn't already leased out? The gold the Bank of England has left is so old it isn't pure enough to deliver. Russia's central bank doesn't allow any gold to leave the country. Spain is about out of gold by now. Germany refuses to sell ANY at all. Whoever sells what they have left for US dollars will wish they hadn't when the dollar collapses, and they all know it. Basically they are pretending gold isn't important, and no longer selling it or leasing it like they used to. I think they will eventually have to admit that the gold they leased out is gone and won't be coming back. At the same time, mine output is declining, and there are shortages of coins, etc because investor demand is so high that mints can't keep up. So go ahead and sell it short. I'm no authority, and I'm not going to sit here and say it will never get to $800 again, but i don't think I'd want to bet against it longer term with Obama and company adding to the moon high pile of debt with wild abandon.
I don't know what gold will do but how do you figure a major terrorist attack would be bearish for gold?
Al Qaeda no longer exists, iIf you believe it does then you are like those who believed there were WMD in Irak which speaks volume about your intelligence. It's been destroyed and what is left is a number of small groups with little connection to Bin laden (who is dead) and which act independently within a very loose network of islamic fundamentalists. Otherwise, gold has held up very well compared to other commodities, it's rather bullish . And why do you expect a war between India and Pakistan within 2 months ?