Batra & Prechter on gold

...continued from yesterday...

Gold

Batra: deflation tends to lower gold price and uncertainty tends to raise gold price. A falling US Dollar spurs inflationary expectations and therefor tends to raise the price of gold. Batra believes that as stocks crash and a recession sets in, gold could depreciate. But as the downturn becomes a depression, gold will gradually appreciate when the world economy begins to show recovery. His advice is to gradually get into gold as soon as possible. If the depression turns out inflationary, your gold holdings will soar. But if the downturn is moderately deflationary, gold will at least hold its value while most other assets will sharply depreciate.

Prechter: gold could fall during a deflation, but hold a healthy amount of gold anyway.

...back next week...

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