Many an investor has been unpleasantly surprised by the rapid deflation in the price of gold bullion. At face value: it simply doesn't make much sense. Gold is supposed to be a safe-haven when uncertainty grips financial markets. It's supposed to be a hedge when inflation is picking up. Yet, spot gold has now broken through US$1200/oz to the downside. What gives? The answer is actually pretty straightforward. I remain in awe as to why nobody ever talks about the main driver behind the price of gold. Here's my assessment from late 2014, as valuable today as it was back then. Don't buy gold for the wrong reasons at the wrong time. Plus make sure you know the potential headwind in the year(s) ahead (VIEW LINK)
I recall that John Robertson wrote an article about three or four months back suggesting that gold was overvalued. Not a popular view at the time but not unwarranted considering the recent gold price plunge.
I'm obviously in the medium-long term bull camp Rudi, but thats an excellent piece covering the major headwinds! Enjoyed the read!
Excellent insight - overlooked by several so called South Asian experts.