[Gaijin 06] Gold is still under the $930 levels you were tipping it at earlier in this thread.. and not all equity markets are down that much - Topix is down just 5 or 6% this year. Pretty similar performance to gold.... with a lot more upside risk in the long term.Here is my response to some negative sentiment towards gold...
Firstly I am tipping $2400/oz gold price, but that is subject to 'some' revising as events unfold, so I think this Japan Forum writer is responding to someone else. Most things dont happen overnight. Equities are holding because companies are actually making money from inflation, ie. inventories & plant are revalued up by inflation, and because of all the money floating around, consumer sentiment is actually holding up quiet well. It is not until you see sustained strong inflation that will demand higher interest rates that you will see stronger gold prices. At the moment the Fed is giving priority to holding asset prices rather than reining in inflation. It is of course silly to hold asset prices because that actually would result in less inflation later, but governments like stealthy destruction of purchasing power (by inflation) rather than debt liquidations, foreclosures, etc. The reality is - the result is the same, just the timing is different.
Job levels are still high, and interest rates are still low, so that is helping to hold equity markets. Over the long term equities will go sideways, but you can trade the rallies. Just dont buy & hold.
Andrew Sheldon www.sheldonthinks.com