The 3.5-year bear market in gold may, perhaps, have ended below $1200 last year. We've written often about gold's relative strength and its importance in signalling a forthcoming trend change. On Thursday gold closed at a 20-month high in Euro and foreign currency terms and is nearing a two year high against commodities. Meanwhile, the miners have confirmed the rise in gold. With the exception of GDXJ, every major index has completed a double bottom and is trading around three month highs. We continue to see signs that precious metals are moving into a new bull market. Gold has broken key resistance and is now breaking its downtrend against various equity indices. The miners are confirming gold's rise. https://www.bullionvault.com/gold-news/gold-change-011820151
NCM action of the last month tends to show a willingness to invest in gold stocks. I wonder, however, if it is all a bit too early? Time will tell.
I think the real test will come once the US raises interest rates. The talk in the media is that rates will rise this year, I think there are a lot of uncertainties that could delay an increase. If the price of gold does not get bit to hard after rate rise we should be in a good position moving forward.
How can we ever really know, except in hindsight? From a gut feel perspective, it seems like gold is primed for a break out. The markets are twitchy. Shit just doesn't seem right. Actually, shit seems really bad. But how much of that is purely subjective?
Every time the S&P and DJ take a 2% dump one day and then come back that much the next I think it becomes less and less likely. Everyone's on pins and needles in the market at the moment and rate rises are going to sucked a lot of the cheap money out of Equities. That means when the market takes a 2% dive in bad news it won't come back the next day like it has. I've heard plenty of talking heads say it's looking like it's going to be put off at least until the end of the year for that reason. You also have to remember blue important the energy industry is in the states. A lot of their biggest companies (and best employers) took out massive loans to build capital works to develop energy sources that are now marginally profitable at best thanks to the price falls. Rate rises could really hurt them and would completely hobble any new development. Slumberger is one of the biggest oil industry companies in the states, they supply workers and build and develop equipment for oil and gas companies, they just laid off 3/4 of their workforce, a rate cut would effectively be a death sentence for them. The fed will be thinking about that when they're mulling things over. Similar story with consumer purchasing which is MASSIVE and essential in a consumer economy like the US. The way I see it rates stay low and gold goes up since the presumed rate hike is half priced in already or rates go up and the market lays an egg and gold goes up (and then rates come back down next meeting to counter the effects of the previous rate rise and gold goes up again).
There's some good stuff happening for gold. Seems to me one of them is that the USD has been going parabolic including the period Nov-Jan. Yet gold's has been rising through this Nov-Jan period as well. How good is that? Imagine how gold will go when USD does a Wiley E Coyote.
Exactly bring on the rate rise means gold will rise in every other currency the US will wish gold wasn't traded in US dollars.
^^^ How so? I thought a rate rise will make the usd more attractive and strengthen it. But have also gone with the line (e.g Peter Schiff) that signaling rate rise in US is a bluff and they can't substantially do it.
Increases gold's use as a hedge - makes sense re the Euro, not sure what is meant by Asia. Are you saying this will divert funds from US denominated investments?
What about the fact that recent events in the Eurozone - Swiss depeg, Print and Greece have invalidated the Euro at least in the short term as a hedge in its' own right? Where should the money go now?