"…[Y]ou may be curious why, despite continued money-printing and abysmal US economic reports, gold hasn’t been able to hit new highs. The answer is that gold is currently priced for collapse. Many investors believe the yellow metal has topped out and are selling into every rally. Treasuries have temporarily overtaken gold as the primary safe-haven asset [but, as I see it,] once that dynamic is broken the counterflow into gold will be tremendous.
Gold will continue testing the $1,600 barrier until it surprises to the upside spurred by the announcement of QE III, a calming of fears in Europe, or any shock to the Treasury market.
Remember, the key to this market is to understand that the market for US dollars and dollar-denominated debt is headed off a cliff, which will send the price of precious metals soaring. Now is a time for uncommon confidence. [Read: Martin Armstrong Clearly Explains Why the USD is Strong and Gold Weak in This Terrible Economic Environment]
Nerves of Tin
Being a gold investor is tough business. The last thing any government or corrupt big bank wants is to have a bunch of people putting their savings into hard assets – and gold is one of the hardest of all – so we’re constantly up against tides of propaganda saying that gold has no value or is the refuge of doomsayers.
The effect of this is that even heavy gold investors are always waiting for the other shoe to drop. When house prices were rising, no one was worried that the market had peaked or prices were unsustainable. No one was asking whether all the thin-walled McMansions going up would actually be worth anything in a generation, but for gold, Wall Street has been shorting it all the way up!
Nowhere is this pessimism more evident that in gold mining stocks. Rising inflation has driven production costs higher, but the mistaken belief that inflation is contained and Treasuries are a safer haven is keeping a lid on gold prices. As such, many of the major producers have missed their earnings projections, and their share prices have been punished. This has placed a cloud over the entire sector. In fact, the P/E ratios of major gold miners are near record lows. [Below are links to a number of articles suggesting that now is the time to buy gold mining stocks:..."
at http://www.munknee.com/2012/08/why-isnt-gold-hitting-new-highs-given-whats-going-on-in-the-world-these-days/
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