Notice the 30% correction in 08-09 which happens to be the closest parallel to today's environment. Don't get me wrong I'm very willing to change my mind in a second if the the USD starts to deteriorate or circumstances change but right now things are looking very very deflationary.

If you truly believe in it, I wish you good luck in timing the bottom.

Gold is not a hedge versus inflation though, it is a store of value doing both well in inflation and deflation. As I have stated before.

Meh to this PLAu downswong.

We were in the $1600 before the U.S. credit rating got downgraded, so we're still $100 north of that. People had to sell gold to cover losses elsewhere. So what would you rather own:

1) A Kruggerrand
2) $1745 10 year U.S. Treasury note that is now yielding 1.72%

Pretty easy decision imo.

and headline CPI registered 3.8% for the last year. If we assume it averages 2% over the next 10yrs as the Fed, IN THEIR EXTREME OPTIMAL CASE, plans for, then we still have large negative real yields. Commodities look amazing versus sitting in cash or bonds even they can just upkeep with headline inflation.

This last year I believe a lot of the CPI increase was due to cost push inflation rooted in commodity speculation. 12 months ago there was speculators betting on inflationary pressures due to QE and bought up commodities. I don't hear too much about inflation any more as the deflation camp as won (for now at least)

Consumer Demand continues to drop and credit in the shadow banking system is in a free fall. If crude, copper, and other commodities continue to fall where is inflation going to come from? there won't be cost push or demand pull (the sustainable kind) inflation.

Gold may hold be a store of value relative to other assets but if the dollar continues to strengthen, and it will I believe, gold should comedown in price. In this environment of higher savings and debt deleveraging the money supply is shrinking. less dollars=higher relative value vs anything including gold.

Strong dollar will bring all sorts of further problems down the road which will ultimately force another QE of somesort but I think we are some time away from that. Corporate profits from abroad will be the first to get smacked then equities, jobs, etc etc.

With regards to what currency is the $ actually strengthening?

What I see is a devaluation of all currencies (at least in the long run) and a short term loss of the €'s purchasing power as to the $.

Private credit sure is in decline, which means a lower demand for the currency that may (will) result in a loss of trust ultimately leading to the collapse of the same. (not saying that it will happen soon)

A appreciating currency is in high demand and therefore actually gains value - it has to be healthy - the $ is not healthy.

The $ was accepted as a store of value, particullary in the role of a reserve currency, untill now - this time has ended - the money will continously flow towards gold.

And 1698.10 for the low, I stand corrected.

Also, silver hit a 7 month low at 32.51.

We'll see how low this drops. I think stocks and commodities will continue to go down and markets won't be bouncing until late today or early monday.

the strong dollar portion of your comments I dont disagree with but the fact is they are a leading indicator to another QE and the present influx of dollar demands do not equate with a fundamental, more permanent strengthening of dollar buyers. IF you want to try time the situation fine. But to prosper the most in the long run, buying gold on these dips will not prove to disappoint.

guess I should have waited until toinght to buy that silver :X

aaahhhh whatdoido whatdoidoooooo

the prices in canadian dollars dont looks so bad. If the dollar rush is like the past gold will out perform foreign currencies and then you can just sell your gold in canada and start consuming Canadian goods. The purchasing power parity has improved since the CAD spent a lot of time above par.

ugh guess i shoulda sold over the weekend and rebought once we hit bottom

silver gonna drop to like $25 and gold like $1550-1600

O well can buy more at a big discount i guess

I dont think we are in disagreement. I am making swing trades in Gold (and made a killing the last two days . Long term I think the next QE (aka intentional devalue of the dollar for reasons I listed) will push gold higher. I just think the next week to 3 months will see lots of weakness in Gold. That's all I was stating.

Edi: If these declines continue we could see a parabolic move down if funds are forced to liquidate. Capitulation in gold would be a great time to buy the dip! Look for a 10% down day then BTFD.

Edit agaim: Today could be the day. down over 4% and I see no strong bid. Just saw over 3500 contracts go in a minute!!

New lows for the day of 1680.3 and 31.85

$1650.1 and still no strong bid.

my god $5 drop in a day for silver? lol

swongs are 1 thing

Make that a $6 drop, and still falling...................

Yow, silver's getting raped today.

FWIW, I've seen several chartist bloggers over the last few days predicting a nasty sell-off in the metals, but my skills in technical analysis are pretty weak so take that with a grain of salt.

Oh my, more lows. Silver actually got below 30 for a while there.

My levels are so sick, they actually alter reality to conform to the level.

g

tried.

apparently even MY coin shop can't sell at that much of a loss.

'how much are these maple leafs'?

'yeah, because i can sell them after the ****storm this week has been'

hahaha.

sucks though, i hit the atm on the way planning on buying 10oz of silver and now i'm stuck with cash that i'll end up blowing at the bar tonight.

1st gap filled today.

YEah I agree that the downside will slow around $1400-$1500. The only thing is it might blow through that as liquidations hit the tape before stabilizing. I wouldnt be surprised to see a dead cat bounce next week before taking another leg down.

There was a real strong bid between $1630-1640 today and might be a temporary support level.

I covered my shorts at $1645. Ill wait for the bounce before reshorting.