"The problem for gold is that demand for Treasuries is leading to a rising U.S. dollar. That hits gold, which is priced in dollars, by making it more expensive for buyers who hold other currencies."

Good point above! The euro has been cratering and the dollar has been rising. As long as the euro continues to weaken gold prices will continue to drop.

Indians buy a lot of gold---and the value of the rupee has been dropping like a rock in recent times---it cost more for Indians to convert rupee into dollars---and so they buy less gold.

If the euro hits par with the dollar I wonder what gold prices will be ?

Anyway, Right now all the money the fed is printing is ending up in US govt bonds---and in Europe rescue funds are ending up in the the German bond market.

Someone said bonds are an accident waiting to happen. The big question is one of timing---when ?

Gold has run up from 300/400 back in 2003-04 to 800 in Nov 2008 to 1900+ in Sept 2011---its now back down to 1600

It ought to be fun tracking the price movements of gold.

Rev

Gold will always be a spec commodity rising and falling like major currencies as it's not a consumable commodity.  As major currencies regain their footing, expect gold to decline with prices buttressed only by Indian demand for jewelry, the single largest "consumer" market.

Silver is a better metal to hold because you could always sell it for industrial use.