gold, page-34345

" Gold is a hedge against inflation ie An ounce of gold pretty much has always bought what an ounce of gold could buy over history,..."
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Agree on the QE but I suspect Bernanke had a different objective to what it was suppose to achieved.

I have never been able to understand why it is a hedge against inflation. If inflation picks up and you see it reflected through the bond yields, the opportunity cost of holding a non yielding asset is bond yields - inflation + holding cost. I don't know economics enough to understand how real rates can shrink with a rising inflation but I think Stagflation is the term?

Gold is a product of strong or weak USD. Strong USD gold falls and vice versa. So currently weak USD but gold has been tepid in fact ranging. I know there isn't a one size fits all theory on gold performance and it is complex. Maybe I am thinking too much on the correlations in a simplistic way but my current understanding is if bond yield rises, gold will sink. If AUD rises and the Oz economy improves to a point Lowe has to raise rates, gold producer's margin will sink.

Besides that I am not prepared to call a equity market crash like the one I had to go through just because Feds selling bonds isn't necessary going to deflate the economy in the same effect QE didn't even create any inflation unless you call equities inflation.

I will have to rely on the charts to navigate through an shitstorm, not getting fully exposed to the equity markets, always keep a lot of powder dry so I don't get sucked into the GFC mindset having to rely on time to get out of a difficult position. I was lucky but I'll be pushing it if I haven't learned my GFC lesson!