Former Chairman of President Reagan´s Economic Council:, Martin Feldstein via 321gold.
“In short, there are better ways than gold to hedge inflation risk and exchange-rate risk. TIPS, or their equivalent from other governments, provide safe inflation hedges, and explicit currency futures can offset exchange-rate risks.
Nevertheless, although gold is not an appropriate hedge against inflation risk or exchange-rate risk, it may be a very good investment. After all, the dollar value of gold has nearly tripled since 2005. And gold is a liquid asset that provides diversification in a portfolio of stocks, bonds and real estate.
But gold is also a high-risk and highly volatile investment. Unlike common stock, bonds, and real estate, the value of gold does not reflect underlying earnings. Gold is a purely speculative investment. Over the next few years, it may fall to $500 an ounce or rise to $2,000 an ounce. There is no way to know which it will be. Caveat emptor. “
My Comment:
My interpretation of that is that there´s going to be a concerted effort to push the gold prices lower, which coincides with a technical need to correct…
My own take on it is, he doesn’t know what’s going to happen to gold. Had he been a gold expert, he would have forecasted a trading range.
Of course, my perspective is more trees than forest because I’m watching the gold market.
You mean you think he’s hedging his bets. I don’t think so. Goldman put out a forecast a few months ago that gold would reach 1200. It duly reached that level. Once it did that, the MSM,which had begun looking on it benignly, started changing its tune and now that it’s gone under 1100, he crowd is following.
I stick to my feeling that there will be more correction, but until it goes below 1070 o so,it’s hard to say.
I think India bought in the 1040’s if I’m not mistaken, so maybe that will be a kind of floor.
I think not, though.