Who's responsible for keeping the price of gold down?
While there is no doubt that governmental policies can and do impact POG, I believe that most influence is an unintended consequence and not intentional. It is important to realize that as Goldbugs we tend to relate everything economic to POG, but that is NOT the focus for national leaders who have many other political priorities. Having bot. my first gold @ $290 spot 16 years ago, perhaps I can't quite share the belief that gold is "down".
So what does determine POG? IMO it is the value (purchasing power) of fiat currency (USDX) + the degree of perceived market risk (VIX). Other than novelty coinage and jewelry, most gold is purchased as a safe place to park capital in times of economic stress and heightened risk, and a Wall Street now accustomed to a 9 year bull stock market is deeply into the punch bowl and insists on playing it like the good times will never end. Of course we all know that it does end eventually, and nine years makes this bull rather long in tooth.
My experience is that gold does well in times of economic stress, particularity those which threaten price inflation. IMO the combination of tariffs, taxes paid by the consumer thus reducing disposable income and threatening corporate profits, coupled with heightened uncertainty of trade policies, could precipitate a serious contraction possibly leading to recession. They say that history doesn't repeat itself, but in Nov. '07 I closed my portfolio of gold stocks and went 100% physical, by Dec. '08 the gold had appreciated 5.56% while the gold stocks I sold had lost 30%. When I replaced those gold stocks I realized approx. 35% gain for that year. The point I am trying to make is that Goldbugs need to remain flexible, stay informed on economic/financial developments, and be willing to change strategy.
So what do we know: The U.S. stock market is climbing a steepening "Wall of Worry" while EM stock markets are under pressure as perceived risk increases. The global stock markets have experienced unusually large intra-day swings that are a characteristic of growing uncertainty, which can easily morph into fear itself. What we don't know is what is going to happen or when, however we can be reasonable assured that indications of the direction the future market will go will appear. PM traders need to stay aware, never fall in love with a stock, and trust in your own judgment.
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