In light of the great selloff in the stock market on July 2, one would have expected that exiting investors would have fled to Gold and to Bonds. They did fly to Bonds, but not to Gold – which declined more than $11; and that leads to a question: What’s going on here?
The answer is that Gold is not the safe haven that it’s cracked up to be. The price of Gold usually advances in times of inflation, along with the price of almost everything else. However, it is deflation that rules today; and it will carry the price of Gold down, together with almost everything else – except Cash.
We expect to see many more black Candlesticks for Gold as deflation continues to tighten its grip on the economy.
