I am a gold bull, but not a perma-gold bull: factors for consideration regarding the purchase gold

Gold had a horrendous year in 2013 disappointing many of its supporters; however, 2014 started brightly bringing with it much hope for an attempt at achieving new record highs. Gold prices moved quickly from the $1200/oz level to flirt with $1400/oz by mid-March. The summer brought some confusion with gold rallying and falling without much in the way of conviction in either direction. As optimists we can argue that the summer doldrums arrived to take the steam out of the market and that better times lie ahead. The pessimists suggest that gold is struggling to gain some traction and will head lower in the near future, so we will take a brief look at some of the factors that affect gold's movements.

• No new large discoveries of gold deposits dampening supply
• Lack of previous investment for gold exploration
• It takes up to 10 years to bring a new mine to production
• Falling gold production worldwide adding to its scarcity
• Gold EFTs take gold off the market thus reducing supply
• In the last Bull Run 70s to 80s gold prices increased 20 fold
• Metrics: DJIA vs. Gold, about 19ozs buys the Dow Jones, it has been 1:1 in the past and could be again in the future. Assuming the Dow Jones remains above 10,000 then the gold price could hit $10,000
• Gold at its previous high of $850 adjusted for inflation puts the gold price at $2000 plus
• Geopolitical uncertainty, a nuclear Iran creates world tension which pushes up the price of gold
• A Dictatorial South America imposing restrictions such as increased taxation and nationalization will deter investment and reduce gold production
• India is growing and the sleeping dragon of China has awoken, their hunger for gold will drive gold prices higher
• Internet: information travels around the world in a nano-second, reactions to news, true or false, will add to the volatility of the gold price
• Web trading: increasing every day, resulting in the trends being more exaggerated than ever before
• The mania that I traded in during the last Bull market will be nothing compared to the coming Gold price explosion and the maniacal actions of traders and everyday people in the precious metals sector.