Can Gold Get Out of Its Rut?


Howard Gold Image Howard Gold Founder & President, GoldenEgg Investing

It's been more than a year since the yellow metal's serious run ended, relegating it to bouncing around a range far short of its all-time highs. Could 2013 change the game? MoneyShow's Howard R. Gold, also of The Independent Agenda, weighs in.

Gold was a quiet winner before its big sell-off this week. The yellow metal had worked its way up from around $1,560 an ounce back in July to nearly $1,800 in October. Just last week it changed hands at $1,750.

But then came waves of selling, which drove the price below $1,690 by Thursday morning, still slightly above support levels.

But gold has gone nowhere in more than a year. It peaked near $1,900 in September 2011 and hasn’t come within $100 of that since. It fell as low as $1,540 in May. Though it’s still up 8% in 2012, this year’s rally is looking pretty shaky.

And US stocks, which so many investors still hate, have wiped the floor with gold. Since last September 22, when stocks and gold began to decouple, the S&P 500 index has risen 25% while the SPDR Gold Shares ETF (GLD) has lost 3%.

So what’s next for gold?

Back in March, I wrote a column called “End of the Gold Bull on the Horizon,” in which I laid out a scenario where gold, well, just wouldn’t shine:

“If the trend continues, this might suggest a scenario of slowly recovering global economies, gradual deleveraging, and little inflation in the real world—plus a firmer dollar.