A Few Questions To Those Who Slam Gold
The simple answer to all questions: Gold is the "currency" of last resort, against the USD in times of inflation. It needs inflation, and there isn't any globally.
Instead the global economies are struggling with deflation. The PBOC, BOJ trying to deflate their currencies so as encourage inflation, and stimulate their economies. Then the ECB responds. The only central bank siting tight, and not trying to race to the bottom is the US Fed. Thus, the USD strengthens against Gold. Then we have the Fed worrying they might get behind the curve on raising rates. Further strengthening the USD. What happened when Yellen (aka The Honey Badger) last week implied a rate hike was quite probable in Jul or even Jun? The EUR took a dump against the USD. More strength for the USD, and Gold went down.
A major source of the deflation is OPEC. Exporting deflation to the ROW in the form of flooding the market with cheap oil. It also has a deflationary effect on the US economy. Shale oil in 2014 accounted for somewhere close to 70% of business growth, and loans. It was a growth story, helping the US balance of trade. Also a potential inflationary growth story. But then the Saudis declared an economic oil war on the US oil industry. A deflationary story now, with the oil industry hunkered down. The banks which lend the money out, forced to set aside reserves to cover potential high risk loans. Less money to lend out. Deflationary to the US economy. But Honey Badger don't care. Hike those rates.
Until oil recovers, with base metals following, inflation is going to be hard to generate in the US, and globally. Instead it's the problem of deflation, which is worse outside the US. Resulting in a stronger USD, with Gold going down in response. Until then the USD will keep getting stronger (e.g. don't invest in US biotech with large earnings in the EU - they are getting a major hit via the EUR/USD FX exchange). Gold hasn't hit bottom yet. It won't until the deflationary pressures in the ROW goes away. Where the other currencies recover, with the USD going down.
The Jewel of the Mind is Colored with the Hue of what it Imagines
