I have been researching this issue quite a bit lately. The last 3 recession have seen gold go down in price for the duration of the recession. 1972, 1980 and 1990. So Roubini has recent history on his side for this call.
However, economic historians with strong forecasting skills like Bob Hoye and Marc Faber say that gold increases in price after a large credit bust like what we’re having right now. (This is a far more rare event than the more typical recessions we’ve seen in the past 30 years.) Both the ElliotWave and Candle Stick charts are extremely bullish for gold right now as well.
I’ve put my bet on the historians for this one, eventhough I agree that Roubini has been pretty good lately as well. It looks like gold’s a good bet in a 5 year time frame regardless, but it’s always nice to time these things closer to the mark than not.
