RE: I TOLD YOU !The only reason gold is going down is because Bernanke's hell hounds are shorting gold. There are four U.S. banks (JP Morgan being the largest) who are "selling" millions of ounces of gold. I suspect this is naked short selling but as long as no one finds out, they can get away with it. This will come to a screeching halt when someone like China or Russia insists on taking delivery of the gold.
The U.S. dollar is also rising because the Euro is falling because Greece's credit rating has been down rated to junk status. Other European countries will follow suite. So the Euro is falling faster than the U.S. dollar which gives it the impression that the dollar is strengthening. And let's not forget about the financial crisis in Dubai. I don't think the full story has been told there either. Many countries are on the verge of economic collapse. Who is going to bail them out and with what?
Don't forget the American banks are still insolvent. They only gave back the Tarp money before Christmas so they could give out bonuses. Most of the toxic assets are still on their books. Some of them will pay it off by issuing more shares which of course will dilute their stock price and their shareholders will end up paying for it. This will send their shares back down to the previous lows. Does anyone think the gov't is going to bail out the banks a second time? I don't think so.
There are more bank closures are on the horizon for 2010. The U.S. debt problem is still there. Unemployment is still rampant. The health care bill may pass, which means a trillion more dollars will have to be borrowed to pay for it. No foreign gov't is buying U.S. short term treasuries so the Federal Reserve has to buy them. Oh, and by the way, $2 trillion of treasuries are coming due in 2010 and the gov't will have to cover it. How? Well, by printing more money of course.
Gold will rally back in 2010 in a big way. All of the dominoes are lined up and it takes just one of them to fall to cause the dollar to go into a nose dive. Sure gold in the short term, 30 days, may correct. But if it goes below $1000, it is time to load up.
Wiz