[quote=fat_lazy_union_worker]
I always thought in an deflation, everything comes down, including gold.
What do I know, though.[/quote]
You are probably right, but perhaps not for the reasons you think.
There will less industrial demand for gold in a high unemployment, deflationary environment. Additionally, there will be less speculative demand as many people will be spending what little money they have on the basics.
Additionally, as has been mentioned, there is a tremendous scramble for cash amongst leveraged hedge funds to cover redemptions and margin calls. Many are unloading lucrative gold positions to cover their bad bets.
