The wild swings in gold suggest that the bull market might be over, at least for now. If it drops, I think we'll see a lot head for the door.
people said the same thing about the wild swings at much lower prices ... the main point is that if one can take advantage of the volatility in this or any other market that is moving now ... one can either buy a nice bottle of Petrus or make a quick dash to bathroom after an afternoon of drinking bad beer to nurse the losses
Depends... CPI up --> FED keeps rasing --> USD up --> GLD down Deficits up --> Debts up --> USD down --> GLD up Iran + Hurricanes + Peak Oil --> Oil up --> USD down --> GLD up Oil up --> CPI up --> FED keeps raising --> USD up ??? --> GLD ??? Which pressures will be stronger?
i like your post martin but also would like to add at some point inflation (reason for further rate hikes) makes gold more attractive i am bummed as have watched gold go up 35% since my entry in mining stocks which have enjoyed a 40% rise. only to see 4-5% correction in gold (730-690) and my mining stocks are down 25-30%. im in it for the long haul and still like this sector and see this as a buying op at whatever level - but i shudder to think of the sports car i could have bought had i sold friday and bought back today. going to the bar to try to make sense of it all. sigh
If China allows the yuan to strengthen more then that will be the biggest pressure... i.e. higher domestic costs = less demand for commodities. It's the China syndrome that drove commodity prices higher in the first place and it will ultimately be the China syndrome that bursts the bubble. Interest rates, the oil price, political tensions etc.... These are all nice little puffs of air under the main thrust of Chinese growth... They won't be able to hold the brick when it eventually falls...
yuan reval? don't hold yr breath... china knows that will only precipitate the bang... itself imminent due to the staggering size of china npls, and overcapacity across the board, amongst other equally monstruous things... commodities black swan round the corner )
When the gobal markets shudder, we'll have $50 Trillion of global fiat currency chasing $2 Trillion worth of gold assets. Looks to me the longer term gold trend is just beginning. Interesting article on recent Gold demand levels Vs Supply http://money.iwon.com/jsp/nw/nwdt_r...720060515&feed=dji&date=20060515&cat=INDUSTRY
of course, thats where all the fiat money will want to go, gold... i mean, what could be a better asset class than gold? plus its such a great hedge against massive 2.x% hyperinflation, innit? ))