Price of goldAs gold investors (speculators) we depend on a rising price of gold to make money. However some would argue that true investors depend on a falling price of gold - to make the miners cheap so that they can buy and ride them up on the next cycle. So we get used to accepting that gold goes up and down cyclically, and not predictably, regardless of the success of some forecasters. The idea is to buy some shares when gold is down and sell some when it is up. So now that we have falling gold we should be happy, not depressed. This is where money is really made. How low can it go? I predict not much more - by the end of January we will have seen the bottom (but no insults please if I am wrong).
There are times when forecasters can look at the world and take some good educated guesses.
What we can see out there is a mess - Russia and China both are flexing their muscles and look to be world powers on the rise, while the USA is the existing power, does not like them, and may be in decline. In addition, USA does a lot of trade with China and owes China a ridiculous amount of money. USA is entering uncharted seas in a lot of ways - a businessman President with no political experience and an unshakable confidence that he is right and everybody else is wrong, a record high national debt and a deficit that is out of control, a bull market at near historically high length, record low interest rates finally after many years nudging up, low unemployment and low inflation, dependance on other countries for borrowing money, oil prices on the rise, a DOW approaching 20,000, and the end of an unprecedented bull-market (rising prices due to falling yields) in bonds. Gold prices shot up during the inflation crisis in the early 80's, and again during the financial crisis of 2007-9. It has been up and down this year, but in the larger picture that is meaningless. The price seems to reflect what has been going on in the USA rather than the rest of the world, probably because it is priced in US dollars. However things in the rest of the world are dodgy too. In recent times we have seen currency crises in India and Venezuela, as governments try to suck cash out of the system in order to create a new currency, without actually doing it. In addition the Euro is wobbling and EU membership looking less stable than was thought.
So all in all, there are a LOT of ways that gold can come back into favour. Even the unthinkable, a stunning budget surplus and strong US economy, would be good for gold. The thing is, to wait for something to happen takes patience, and most traders don't have it, especially the commercial guys. They have to take a stand and create a trend, even if there isn't one. I think that more than anything has been affecting gold this year. The Trump honeymoon has combined with a Santa rally and people selling bonds to ride equities to create a (latest cliche) "perfect storm", pushing the DOW to record height.
The thing about what happens when the bad news comes, it multiplies itself exponentially. A spat in the South China Sea, or over Taiwan, or Ukraine, has repercussions in budgeting, business, oil, the bond market, etc - it is all so inter-related. I can't see the world getting through the next four years without some problem somewhere....so I am very positive about gold, so much so that I think even now is an excellent time to buy. I like Yamana since it also produces copper. I like the countries that it operates in. I don't like the divvie, but that can change. I don't see it going down more anyway.