Gold is Too Fashionable
The commentators’ opinions are nearly unanimous. Gold has to go up. It certainly is fashionable these days to believe, with the herd, that the price of Gold is going to $1500, $2000, $4000, put any number on it that you like. Oh, the reasons are so compelling: Gold is great hedge against inflation, and since inflation is here for the long haul, one just has to be in Gold; the demand from overseas is unrelenting; the new mines can’t get up to speed fast enough to fill the demand. A thousand and one reasons. And yet, and yet – I worry about Gold. The Japanese Candlesticks patterns and other indicators tell me that Gold peaked on St. Patrick’s Day, and that it’s downhill from here. It isn’t pleasant to be in the minority. However, where others see inflation, I see deflation. It has already begun, in the housing industry. Even in the big box stores, people are starting to haggle over "fixed" prices and are receiving reductions in order to make a sale. My problem with following along with the herd is that I just don’t do it. When "everybody" is thinking one way, to me that’s a danger signal and I automatically start thinking in the other direction. I think Gold will decline.
