[quote=partypup][quote=Sandiagon]As per my analysis, gold may not hold present price (Around $900) for a longer time. Price may go down in next 6 months to one year. At present it is better to keep some money in different foreign currencies (Canadian, Euro, pound, etc…). Dollar may lose values (at least 20% in next six months to two years. Make sure invest in foreign currencies that are convertible to US dollar pretty easily. [/quote]
Sandia, gold will most definitely fluctuate above and below $900 in the near future. The Plunge Protection Team is more active than ever, desperately attempting to short Comex futures to keep gold from hitting $1000. I suspect that sometimes this year their efforts will become much more difficult. I’m curious, though, why expect gold to suffer more than the Looney, Euro, pound, etc, given that they are all fiat currencies and central banks around the world are printing billions (if not trillions) to stem the un-stemmable? The dollar is most certainly going to lose value, but don’t you think that other fiat currencies are going to lose value for the same reason? It seems to me that on balance, gold is the safer alternative.[/quote]
My analysis may be wrong. I will share some of my thoughts here. I have just three years experience in futures market. My analysis is based on following observations and assumptions.
1. As per history (last 15 years) gold and oil are moving in the same directions. Last six months they are not followed that path. Some time in future gold will go down and follow oil.
2. Oil rich countries invest considerable amount of their wealth in gold to beat inflation. Now their revenues are down considerably. Their investment in gold will go down proportionately
3. China govt invested lot of their surplus money in Gold for the last four years. Most probably they are not investing any more. They are planning to spend lot of money (surplus money) on their infrastructure projects in next 5 to 10 years. Their main aim is to employ all their unemployed people in their infrastructure projects.
4. Physical consumption of gold has down a lot. It will go down further until economy recovered.
Right now Dollar is trading at pretty high level. I believe traders are thinking US economy is far better than other economies. But that is not true. National debt passed 10 Trillion dollar http://brillig.com/debt_clock/ . Future foreign investment will go down. This makes US economic recession will stay longer comparing with other economies
