My experience is the smart money is always ahead of the curve, the curve being the general masses and bulk of the investing community. You know, the guys that live in palatial homes with helicopter pads, gararges full of exotic super cars and a super yacht in the marina. These people and their friends didnt accidentally become financial elites because they were stupid ( although l guess a certain percent probably inherited old family money) - they got there through prudential discipline. Whats this got to do with the price of gold? Quite a lot right now l posit.
When the Americans and a lot of Governments around the world habitually run deficit budgets year after year and print money to support the debt that they create, this gradually bebases their currency unless there is a corresponding increase in the countries GDP. Throughout all of recorded history, the death of currencies has always been central government debasement through over printing, or in the Roman Empires case, continually reducing the amount of gold and silver in their coins. Eventually, the masses refuse to accept what the government is circulating because everyone knows its worthless crap.
The Ameticans, under President Nixon, dropped the gold standard in 1972. This allowed the Federal Reserve unfetted power to print as much paper currency as they wanted. The ultimate dream of any Government. If fiscal responsibility through bringing in balanced or surplus budgets was ahered to, then the move away from the gold currency backing, probably wouldnt have been a problem. But thats not what occurred. Fast forward to today, the natinal U.S debt is publically available. The interest repayment on the current debt is more than the annual defense budget and is set to go parabolic as America is forced to print even more currency just to stay solvent. This has a lot of people worried. China now refuses to buy Government Bonds, presumably because they are worried they wont get paid at all, of if they do - in worthless hyper inflated paper currency. Similarly, the Petro Dollar is on death row. The rise of the BRICS trading block has everything to do with this erosion of confidence in the Worlds Reserve currency as well.. Globally, Central Banks are stock piling gold bullion because they seek to anchor their currencies with something of value. One can assume they sense head winds are brewing, because this trend began a few years ago and is increasing.
So, in a very long winded reply to your claim of a major gold price retrace Superchicken, l think its pretty unlikely. Sure we will see gyrations in the daily gold price, but unless the fundamentals that l barely touched on before, change, then there is no reason on earth why the sentiment toward gold would change. In fact, l would go so far as to say, its very likely that the gold price will continue to climb until it reaches a level where "the curve that l talked about", finally wake up that they are missing out. Investment funds will allocate gold back into their porfolios, gold mining shares will become prime investment targets, and that slow steady rise in the gold price, will become a sunami. Then, those crazies who predicted $5000 or $10,000 dollar gold will be lauded as visionaries.
Honestly, l dont know were the price of gold will settle, but l am sure it will be a lot higher than where it currently sits. Obviously, if you belive things are still pretty ok in America, that the FED reports true and valid economic data ( dont get me started on the monthly revisions usually substantially downward that lagg the published figures by a month or two, that nobody pays any attention to), or the avalanch of loan refinances coming up that locked in at one or two percent, but now looking at six percent or higher. What that will do to kick start the economy? Based on this very superficial assessment of the US econommy, l belive the drivers for gold appreciation are all there if one cares to look.
The smart people in those big houses and the Banks are quietly hoarding their gold because they know its the best way to preserve wealth in times of economic uncertainty and possibly near term double digit inflation. Thats why gold will not go down in a nut shell. I think it will become harder to get as things get worse, driving the price even higher. An investment in Red5 should benefit from the direct increase in the gold price and a large revaluation of gold mining stocks generally that have languished in the doldrums for a decade. The hedges will resolve themselves. Huge scope for SP appreciation if the Company is run well.
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