Many articles have been written about this and I think the general consensus is that someone is keeping gold down on purpose. Some say that gold is being sold to raise cash to make up for all the garbage banks/funds have on the books, etc. Or is it governments that are selling to prevent a gold rush? We have the biggest financial crisis since great depression and gold is down? With all the monopoly money that U.S. is printing, how long do you think this can last before gold explodes?
IMF has been planning to sell 12.5 % of their 3,200,000 kg gold (so about 400,000 kg) , since last year. Consensus is that they need to sell even way more (IMF chief economicst said they're out of money and there are still countries knocking on their door te be rescued). I guess that would be one explanation why gold isn't rallying: the more money IMF has to lend to rescue countries, the more gold they will have to sell. You can read more about it here: http://www.imf.org/external/np/exr/faq/goldfaqs.htm, here http://en.wikipedia.org/wiki/Official_gold_reserves and here http://www.breitbart.com/article.php?id=081122230427.xqkurulg&show_article=1
unless every player demand physical delivery, most reserve status gold is kept in vault, and CBs can lease it and resold many time over and over again on paper. It didn't meant a things to gold price up or down.
There have been rumors of terrorist threats to irradiate American gold inventories in order to increase the value of European and Asian supplies.
Holding gold is always part of your investment, but I wouldn't go crazy on holding every my dollar in gold. Gold is not legal tender in most country, however it is the best investment to against "crazy" policy from governments.
If the IMF is allowed to sell gold they could just send it all to China for about 6 week's worth of US trade deficit. Its only $76 billion worth, total. For that matter, the US only has about $225 billion worth of gold. Not even enough to pay for 6 months worth of trade deficit. Not one ounce of IMF gold will get made into a coin, nor see the light of day, IMO.
So it doesn't mean a thing either to oil prices how much inventories there are ? Or if a corn harvest goes bad that doesn't influence the corn futures ? Of course it matters man, that's what it's all about. If some physical commodity gets more scarce or more available, that DIRECTLY influences the market price of that commodity. That is why the IMF has made guideliness, in an attempt to minimize market impact: http://www.imf.org/external/np/exr/faq/goldfaqs.htm It basically means they won't dump everything at once. But, then again, if those emerging counties need money fast, IMF might need to dump fast. And again, I do think that might be an explanation for the current low gold prices, combined with forced liquidations from hedgefunds/investment funds. Everybody knows most of them work with 1:50 leverage, so they're getting margin calls pretty fast and need to sell pretty fast as well when they lose on their investments. And long gold, long oil and short USD was pretty popular until recently.
have you guys looked at gold against any other currency other then the dollar? gold is rocking. even in USD terms only 15% below its 52 high. and you can buy much more oil with gold then you could a month ago.