Deflation Will Drive The Price Of Gold Lower

In my October 29th article What Will Gold And The Dollar Do Next? explaining what I see next for precious metals I said the dollar will move past 100 to 120 and that gold will fall below $1,000 an ounce during this move. The dollar was just over 97 on the index and has moved to a high of 100.09 as of Nov. 25th, or almost 3% in one month. Gold Meanwhile has fallen from $1,159 on October 29th to $1,070 as of Nov. 25th or a decline of 7.68%.

(click to enlarge)

(click to enlarge)

Ever since I wrote my first book Buy Gold and Silver Safely in 2010 I have been in the deflation camp. I spent a month straight researching Chapter 4 of that book where it explained in detail the potential of a deflationary credit contraction. At the time there was an ongoing debate among many on whether we were going to experience inflation or deflation. It is clear now we are in deflation yet investors still don’t know what that means or how it could affect their investments.

Before getting into detail on what I see going on with deflation, we must first start with the proper definition of deflation……..

Read more here on Seeking Alpha.