How does prosperity hurt gold?
When the markets are doing well and inflation is low and stable gold will not be seen as a necessary form of wealth and will fall in price as it goes out of favor with investors. Since gold does not produce interest or dividends, many investors may shun it in search of higher returns in the stock market. Since in prosperity inflation is low (5% a year or less), and their stocks are going up rapidly, investors may not feel as threatened that their dollars are losing value too quickly and are willing to hold on to dollars instead of gold.
