Gold Price Dropping...like a stone

Pinnacle Digest writes: In this article Adrian Ash of bullionvault.com addresses the mad sell-off in gold. Ash discusses the unpredictability of gold and the fact that more analysts than ever agree the fundamentals behind the yellow metal are historically strong - yet the price is dropping like a stone.

Adrian Ash explains that despite a run on the banks in Greece, Spain on the verge of a bailout and the US running into another debt-ceiling fiasco, investors are running back to the greenback. Go figure. 5,000 years of reliable purchasing power from gold appears to mean nothing. Yet, if the dollar continues to rally, the US debt will become harder to service without dramatic GDP growth. We’ve always stated here at Pinnacle that the Fed wants a weaker US dollar, but for demand to remain strong. This is proving to be a tall order. Demand is rising for the USD, but so is its price.

To put gold’s price drop in relative perspective, we must keep in mind that it has been the best performing asset class for more than a decade. Isn’t it fair to expect a pullback along the way.

Click here to read Adrian Ash’s article on the subject.