What will gold do in a possible recession

Discussion in 'Commodity Futures' started by Daal, May 4, 2007.

  1. Daal


    Conventional consensus say it will go up, problem is consensus is usually wrong
  2. it is a shiny rock, it will just sit there
  3. Actually, I think it's a metal.
  4. Stocks and gold are liquidity driven. Gold will follow the S&P.
  5. Joab


    It's an Inflationary Hedge always has been always will be.

    It will rise IF the recession is Inflationary based.
  6. Daal


    I have the same worry
  7. In the depression, the stock market went to hell except gold mining stocks. The reason gold became more valuable was because people lost faith in the paper money, so what gold went up 50% as they devalued the dollar.

    Basically what happened to cause it was the Fed printed lots of money and made credit easy to get in the 20's, then when they attempted to calm things a bit, the debt bubble burst, and it took with it the rest of the markets and economy. Luckily, the money was backed by gold, so all they had to do was confiscate the gold, and then reissue new money with less gold per dollar backing it to start again.

    This time they no longer have the gold.