You can’t blame investors for seeking gold as a safe haven under these conditions. The same people who made this mess of the financial markets are the same people who are in charge of fixing it? The eternal blame game persists and I don’t believe any of these people really know how to fix the situation. Their only cures consist of throwing money at the problem and this is why gold is moving higher.
We are going to see federal deficits swell and inflation will rise as the dollar eventually drops. Meanwhile, the equity markets want to move higher, but they continuously lose confidence that there is light at the end of the tunnel. And here we have the perfect recipe for gold moving to all-time highs.
Gold looks to challenge the all-time highs around $1,000 and silver will hit formidable resistance around $14. This market is being driven by investor demand and not the normal supply/demand dynamics you often see in most commodities from commercial producers and users. This means the retail public could turn this market into a parabolic move higher and eventually a bubble situation or they could drop it like a hot rock if the stock market regains its majesty.
I have to say that I see higher prices at the end of the year for gold and silver. It could be a rocky road higher, but it should nonetheless be higher. Instead of trading futures, I like buying gold and silver ETFs for a long-term trade/investment.