david25, "Also the market wouldn't start selling gold when the fed announced it was ending the stimulus."
of course it would. Currency dilution is the main headline for gold bugs so a reduction in stimulus should create selling pressure. The FED starts printing in '08 gold goes up, it stops QE and gold goes down.
Now that's rational.
But then Bernanke or some of his cohorts come out and say QE will continue: gold still goes down and why is that? It isn't rational.
And then economic news slants to a US recovery (probably fudged) and gold goes down the toilet on the good news.
General markets go up on bad news and get jittery on good news.
Is that rational? Everyone buys on the way up and sells on the way down, is that rational?
It's a mad world out there and capital preservation is king when the news gets iffy.
