I don't see people currently holding gold selling their gold, but we've got many more people in the stock market now that will have to park their stock money somewhere else when the market blows up.
They will want to invest somewhere safe and hopefully in a place where they can get a decent return. Right now they can leave their money in a U.S. money market account without negative interest rates hurting them, so until the U.S. Fed goes negative on rates that will hurt gold. At the moment most people think the bond market is a safe place for their money, but that could change quickly and if the bond bubble bursts, as some think it will that might be the deflationary disaster approaching and if so that's where you don't want to be. You'll have a certain number of people sticking money into CD's and defensive-type stocks, but what would send people fleeing a stock market crash into PM's in great numbers?
IMO the event will be something that has people losing faith in the system and moving their assets out of anything government backed. I.E. bonds. If faith is lost in the bond market faith is in essence lost in the government. What an event like that would do for the PM market would be huge, because it would be the only safe haven left to hide. That would be the perfect storm for the PM market to move much higher and why gold would skyrocket upon such an event, even if it is deflationary.
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