"US economy whether we believe or not is improving"
The jury is definitely out on whether or not that is sustainable. I hope it is- but there's that hope word again! However POG has well and truly factored in a lot of negatives for gold as evidenced by lack of ability of many producers to make any positive cash flow at all, let alone enough to justify any significant new production.
POG is simply far too low no matter what the US economy does. No increase in POG, no new development of enough scale to offset depleting mines and unprofitable mines which are being shut down. Production will decrease. Chinese demand expected to remain at high levels while Indian demand can only rise from current low levels. These are the two largest buyers. This is not sustainable regardless of what the US economy does.
If US economy actually does improve, that should boost China and India. Boost their disposable income and gold demand is boosted. Chinese disposable income has been rising steadily and strongly unabated even while US was weak. Timing a higher POG is dangerous. Assuming lower POG because of what the US economy does is even more dangerous.
What was the US economy doing between 2001 to 2007 while gold was enjoying a strong bull market? US economic growth was much stronger than it is now yet gold enjoyed a strong bull market. Don't let the media suck you in with stories that gold price must go lower if US economy builds strength, especially after gold has already heavily corrected.
MML Price at posting:
$1.32 Sentiment: None Disclosure: Not Held
(20min delay)