Gold briefly touched USD1900/oz yesterday but fell to USD1850/oz today. The chart shows that it's been rising exponentially and is unsustainable. I bought more from 1550 and didn't expect it will surge almost 20%! I started to invest in gold at around USD1000/oz. It has been a very profitable trade for me. I've started taking profit and almost liquidated half my positions. I believe gold will reach USD2200 - 2500 soon on central bank buying an more QE announcements.
Stocks seems to have embarked on another rally that may last from as little as one week to as long as a month. I doubt if it will break the May high. The STI, currently at 2750, will probably rebound to 3000 before falling off again. QE 3 will come very late, probably in 1Q 2012 and by then STI could have fallen to 2300. There's no growth, but stocks won't collapse because companies have a lot of cash to engage in share buybacks, pay more dividends and embark on M&As.
One interesting asset class other than gold that seems to have done well is Agriculture. It looks like embarking on a month to a year's worth of rally. Commodity futures look set to outperform in this inflationary period.
This is the same situation as in 1970 - 1975; stagflationary times. It's not so good for equities. It's very bad for bonds. It's very good for commodities, especially gold.
