Since the huge decline of gold's dollar price last July 20, numerous articles were written predicting for deeper decline. For these analysts, gold has just started its real bear market, and blamed the gold bugs for the big loss suffered by those who followed their advice.
(To the blogger's mind, nobody best represent a gold-hater and a gold-bug than Ben Bernanke and Peter Schiff respectively.)
Let us start with gold-haters. Here's one from Wall Street:
"Gold is supposed to be a haven amid hard times and soft money. So why, even as Greece has defaulted, the euro has sunk against the dollar, and the Chinese stock market has stumbled, has gold been sitting there like a pet rock?" - Wall Street
http://blogs.wsj.com/moneybeat/2015/07/17/lets-be-honest-about-gold-its-a-pet-rock/
And another from Washington Post:
"When you think about it, a bet on gold is really a bet that the people in charge don’t know what they’re doing." - Matt O'Brien, 25 July
http://www.washingtonpost.com/news/wonkblog/wp/2015/07/25/gold-is-doomed/
And two articles from Bloomberg:
"Prices will drop to $984 an ounce before January, according to the average estimate in a Bloomberg News survey of 16 analysts and traders." - Debarati Roy and Eddie Van Der Walt, 29 July
http://www.bloomberg.com/news/articles/2015-07-28/gold-out-of-style-like-bell-bottom-trousers-signals-lower-prices
"Other countries, however, are bigger gold bugs . . . countries like Lebanon, Egypt, Laos, Pakistan, Kazakhstan and Turkey all have a bigger share of gold in their reserves than Russia does, and so face bigger problems from the price collapse." - Leonid Bershidsky, 29 July
http://www.bloombergview.com/articles/2015-07-29/russia-can-t-help-being-a-gold-bug
And finally, from Market Watch:
"Earlier this week, he told me that the gold community now needs to consider the distinct possibility that gold will trade for as low as $350 an ounce." - Mark Hulbert, 30 July
http://www.marketwatch.com/story/investors-need-to-consider-that-gold-may-fall-to-350-an-ounce-2015-07-29?siteid=rss&rss=1
On the other hand for the gold bugs, what happened last Monday is a sign that gold's bear market is about to end. They don't deny the reality of further decline, but they are positive that the sign or reversal is close.
Here's from Business Insider:
"Gold has had a terrible year so far, dropping to a five-year low in July to $US1080 an ounce, but analysts at Macquarie think the price could rally in 2016."
http://www.businessinsider.com.au/the-178000-tonnes-of-gold-in-the-world-might-be-worth-more-in-2016-2015-7
And then from Kitco:
". . . gold thrives in the face of monetary turmoil, disorder and uncertainty, . . . 'I think we have all three of these things.'”
http://www.kitco.com/news/video/show/Kitco-News/1035/2015-07-31/REPEAT-Im-Bullish-On-Gold-Fed-In-A-Hurry-To-Raise-Rates---Jim-Grant
And here's from Zero Hedge:
". . . gold would experience a severe correction before beginning its real bull market. We are seeing his prediction unfold before our very eyes. What he also said is that as gold approached the $1,000 per/oz mark or even below, everyone would proclaim that 'gold is dead' and start making comically bearish statements." - Tyler Durden, 29 July
http://www.zerohedge.com/news/2015-07-29/4-mainstream-media-articles-mocking-gold-should-make-you-think
And finally, from King World News:
" I’m not a day trader of gold; I’m a long-term holder. The bottom line is that I believe that the gold market has now seen the worst. Could it go just a bit lower? Yes. But compared to an upside potential of well over $2,000, the downside risk is low.” - Gerald Celente, 22 July 2015
http://kingworldnews.com/gerald-celente-the-panic-thats-happening-right-now-is-much-bigger-than-just-the-gold-market/
What inspired me to collate the above quotes both from the gold haters and the gold bugs is my reading of a book written by another "gold bug" (Of course, Jim Rickard doesn't like to be classified as "gold bug"). In his book, The Death of Money: The Coming Collapse of the International Monetary System, I found two interesting sections related to gold market. In chapter 8, he wrote:
"On April 16, 2009, just days after the G20 summit, President Obama sent letters to the congressional leadership requesting its support for a $100 billion commitment to the new IMF borrowings. . . . The letters to Congress stated that the new funding was a package deal intended to increase IMF votes for China and to force gold sales by the IMF."
"China wanted additional votes at the IMF, and it wanted more gold dumped on the market to avoid a run-up in the price at a time when it was acquiring gold covertly."
"It was curious that just as Federal Reserve officials were publicly disparaging gold’s role in the monetary system, the president felt the need to mention gold to the Congress as a confidence booster. Despite disparagement of gold by academics and central bankers, gold has never fully lost its place as the bedrock of global finance."
And then in Chapter 9:
"The total gold supply in the world today, exclusive of reserves in the ground, is approximately 163,000 tonnes. The portion of that gold held by official institutions, such as central banks, national treasuries, and the IMF, is 31,868.8 tonnes. Using a $1,500-per-ounce price, the official gold in the world has a $1.7 trillion market value. This value is far smaller than the total money supply of the major trading and financial powers in the world. For example, U.S. money supply alone, using the M1 measure provided by the U.S. Federal Reserve, was $2.5 trillion at the end of June 2013. The broader Fed M2 money supply was $10.6 trillion at the same period. Combining this with money supplies of the ECB, the Bank of Japan, and the People’s Bank of China pushes global money supply for the big four economic zones to $20 trillion for M1 and $48 trillion for M2. If global money supply were limited to $1.7 trillion of gold instead of $48 trillion of M2 paper money, the result would be disastrously deflationary and lead to a severe depression."
"The problem in this scenario is not the amount of gold but the price. There is ample gold at the right price. If gold were $17,500 per ounce, the official gold supply would roughly equal the M1 money supply of the Eurozone, Japan, China, and the United States combined."
(Source: James Rickards, The Death of Money: The Coming Collapse of the International Monetary System, 2014, pp. 140, 151-152)
The above paragraphs are self-explanatory. If the information provided by Jim Rickards is accurate, then the mainstream gold-haters are mistaken, and it is actually them that are misleading investors and traders.
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