If there is a massive shrinking of the USD supply, the USD price of gold will go down to nearly nothing. But that's irrelevant. Everything will go down in USD price, so I will be able to buy just as much for my gold. However, there is another more interesting aspect to this scenario. If there are no dollars, there's no trade in dollars. People will trade is a different currency, or barter.
USD price for gold is pretty much irrelevant, if you use gold as a store of value. The USD isn't exactly stable either. Besides that, I'm talking about gold that you can actually touch. Not paper gold.
thats pretty much conventional wisdom and history is on your side! i, however, like to think out of the box you may have noticed and i think Bitcoin is a game changer. in fact, the only reason i sold my gold/silver recently is BECAUSE of Bitcoin. i sure hope i'm not wrong thats for sure but i think its a paradigm change and will make gold obsolete. i guess that's why we're all here isn't it?
edit: thats a little dramatic. its not the ONLY reason i sold gold. its also b/c i truly do think we've topped out for all the reasons i've said in the thread.