Trading commodities is a very tricky endeavor on the very best of days. While one can make an attempt to interpret the supply (production, recycling, etc.) and the demand (industrial production, food production, investment, etc.) picture, it is very difficult to do so in real time. It is particularly difficult with the precious metals. Physical gold tends to be bought and put away. Paper gold (futures, options & ETFs) is a vehicle for trading. The global inventory of gold tends to rise year-by-year. While gold is used in electronics, it is only used in special cases where conductivity and corrosion resistance is of paramount importance. At the end of the day, very little gold is used in production. What little is used gets recycled at the end of the products life. What drives the price of gold is fear of inflation, economic disruption, faith in government, central bank portfolio policy, etc.
