The attached article mentions a curiosity as to why gold isn’t higher now than the 1035 high it reached last year given that now the world is officially going to hell in a hand basket when previously things weren’t looking as gloomy.
Personally, i think a lot of it has to do with risk appetite. Last time gold reached a 1035 high there was massive speculative demand and the world was a great place, i know because i still had a job!! Every hedge fund under the sun was buying the shiny stuff regardless of what the global economic outlook was at the time. Fast forward to now and you have a very different landscape to view. A lot of the speculative players have fallen by the wayside or at least had their limits severely reigned in which has seen the speculative interest wane which is why we have been seeing a steady solid rise in gold this time round as the physical demand pushes up the price as opposed to the trader mad speculative demand driving up the paper price. I think this is a reason why we will continue through the previous high and grind our way towards USD2000 oz in the coming year or two.
That explanation makes sense to me, but if anyone has any other ideas i would be happy to hear them.
