Well I'm struggling to make sense of what's happening in the gold market. CNBC is reporting that people are hording physical gold in their homes. This is the big scare that should be sending people towards gold because it is "safe". If the bailout fails, the market crashes and naturally people would run towards gold. Banks are failing left and right, people should be running towards gold. The bailout plan should also send gold higher if you believe it will cause inflation. etc.. etc.. What am I to think when Gold, Oil and the stock market are all going down on at the same time like today? People would say it's deflationary, but does it have to do with Hedge funds unwinding their positions in gold and other commodities? What do you guys think? What will happen to gold in the immediate future (1-4 weeks) and beyond?
so, gathering wild guesses will help your trading or investment plans? No one has a clue. Follow the market
I would have to guess deflation. Oil/ag is easily explained due to a global slowdown. Right now bonds/notes and the dollar seem to be the only thing not coming down. That points to deflation, IMO.
The drop in gold is due to a general expected uplift as it was believed the congress would pass the bailout package, and from an artificial strengthening of the Geen bag against the Pound and Euro. When the dust settles and the bailout is shown to have little effect to prop up the market, due to world wide economic slowdown, the value of gold will go up. There is no physical inventory to speak of, this has been going on for some time, not just the fiasco we witnessed on Monday.