If jewelry dominates gold demand then its price will correlate positively with economic cycles, not inversely.
That has indeed been the case over the past few years. Note that a great deal of the demand is in the Asian countries, where economies have boomed the last few years. That said, it appears gold has found a relative equilibrium in the past year, although in one of his only lucid posts, Shedlock did show that gold has had a strong seasonal component of late. I suspect that’s due to the wedding season in India and the gold festivals in the April time frame.
I do believe it’s likely a good time to “buy the dip” on gold.
If there is a global recession, people will sell it and some will melt the jewelry for cash to buy necessities.
Good point.
