I must confess that I am not an expert on these things, but it seems to me that the move to the 13000 mark was done on expectations of a speedy recovery for the global economy in general and the US economy in particular, hopes that must have vanished when people heard that in Europe the gross domestic product shrank 0.3 percent from the third quarter, indicating the possibility of a second recession in 3 years.
Apparently, austerity still seems to be contractionary although some people, including politicians like Merkel, still believe that it is expansionary through the so called confidence effect.
And let's not forget that Europe is the No 1 destination for the Chinese exports and also that the European financial problems can easily spill over to the other side of the Atlantic and from there to the entire Pacific.
As to the true value of gold, the problem is that nobody seems to know how to exactly determine it at least ex-ante.
FML Price at posting:
4.9¢ Sentiment: None Disclosure: Held
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