"The failure in Sept 2012, below previous high was a big flashing light to get out of physical and gold stocks. Through out the bull marlet after a 12-18 mth correction gold surged to a new high. This in conjunction with tradies who I was having a beer with late 2011 and early 2012 saying you couldn't lose with gold, and a friends I-phone photo of queues at the Australian Bullion Company in Sydney around this time were key information, ie the general public were buying. I believe the surge to $1920 US in Aug/ Sept 2011 was what a blow off top looks like in a low inflation/ deflationary environment rather than the high inflation 70s"
Excellent points. I been thinking if this could be the case.
Lets not forget the gold ATM machines appearing in Germany and other countries as a sign of at least a major medium term top.
However, I still think there is a good chance that even if there is a significant fall in the POG to perhaps USD1200, there could be another burst up to over $2,000. This could happen if Asia becomes a lot more prosperous in the next few years or if there is significant inflation there.
I expect the Indians to be buying a lot more gold at the lower POG because their import duties will be more than offset by the lower POG. I am not sure how the Chinese will react to a much lower POG, perhaps initially selling down but then accumulating at lower prices. It will depend on their inflation rate relative to interest rates.
loki
SLR Price at posting:
$2.08 Sentiment: Hold Disclosure: Not Held
