Gyroscopic Investing

Deflation Will Drive The Price Of Gold Lower

Summary:

• What you don't know about deflation can hurt your investments
• The proper definition of deflation explained
• Deflation is why I have stuck with my calls for lower prices in gold, and been right about them, even though I sell gold and silver for a living
• What deflation means for the future prices of the dollar and gold

(read the entire article at SeekingAlpha.com...)

The money paragraph:

Once we are under $1,000 an ounce in gold, which we are only about $70 away, my job in analyzing the markets will become more difficult. But I will leave you with this thought; if you bought gold today at $1,070 or caught the bottom just under $850 if it got that low, and now it is 5 years down the road and gold is $2500 an ounce or higher, does it matter where you bought?

We are now $13 closer to that $1000 price...

When did he predict that gold would go almost to $2000, and how long did it take for him to realize that was a fairly significant top?

In other words, if you predict early and often, you will be right sometimes. However, that doesn't mean that you will continue to be right. Read HB's "Why the best laid investment plans usually go wrong" for a lot more on this topic.

I give him credit for being a gold dealer and warning potential clients of downside risk. That's uncommonly decent. I'm sure he got caught unawares like everyone in every industry does when trends and markets shift. But he did claim to call a top successfully in the gold miners, though I had no interest in gold or miners at the time, so I wasn't around to read it.

This makes me think we're definitely going lower.

After all, I first bought gold at around $250 an ounce.  It was the ultimate fear trade.

MachineGhost wrote: This makes me think we're definitely going lower.

After all, I first bought gold at around $250 an ounce.  It was the ultimate fear trade.

WHOA. I wish I'd been interested in gold and moving averages back in 2001. Sigh.

ochotona wrote: WHOA. I wish I'd been interested in gold and moving averages back in 2001. Sigh.

Don't worry, I didn't profit from it.