December 2, 2013
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November 26, 2013
With the Dow topping 16000 and the S&P500 index reaching 1800 – both psychologically important levels – gold continues to be an innocent victim of the frenzy on Wall Street.
Trading around $1245 an ounce the metal’s price is off some 25 percent from the start of 2013 and is 35 percent below its September 2011 all-time high.
Reflecting the super-stimulative monetary policies currently pursued by the U.S. Federal Reserve, the Bank of Japan, and the European Central Bank, U.S. and world equity markets are achieving new all-time highs as more and more investors jump on the stock-market band wagon. And, rising equity markets are, in turn, sucking investment dollars out of gold for redeployment in dividend-yielding stocks.
November 6, 2013
It won’t take a collapse of the dollar or some doomsday scenario to catapult the price of gold well above its September 2011 all-time high of $1,924 an ounce.
A decline in the greenback’s value and international prestige may or may not be in the cards. So, too, might troublesome inflation, a collapse on world equity markets, or another financial crisis of some sort. But these are not necessary prerequisites for gold to resume its long-term price ascent.
Indeed, not withstanding the possibility of further gold-price weakness in the next year or so, I am confident China’s insatiable appetite for the yellow metal can single-handedly lift its price well above its historic high.
October 24, 2013
With Washington’s latest budget and debt-ceiling crisis behind us, gold traders and investors are refocusing their attention on U.S. monetary prospect – with expectations of tapering later this year rising and falling with the flow of economic data and the apparent strength of economic recovery.
But, before long, America’s dysfunctional politics will again share the limelight as a key gold-price driver.
October 8, 2013
It would seem that the stars are perfectly aligned to send gold soaring. But, instead, gold’s recent failure to sustain brief rallies and generate any lasting upward momentum has many gold bulls asking “If not now, when?”
Indeed, the early-autumn economic and financial news should have fueled a significant advance in the metal’s price – or so conventional thinking would suggest, what with the Fed’s postponement of tapering, the fiscal impasse and partial government shut-down in Washington, and the approaching debt-ceiling and possibly perilous U.S. Treasury default in world financial markets.
September 19, 2013
I’m on holiday this week and next but feel compelled to post a brief comment on NicholsOnGold.com following the Fed’s September 18th decision to maintain is stimulative monetary policy. Contrary to strongly held market expectations, the Fed has postponed the commencement of tapering – a policy of gradually dialing back or reducing its $85 billion monthly bond purchases.
Though a bombshell to gold and other financial markets, the postponement of tapering was no surprise to our readers and clients. We have long argued that a weaker economy, highly vulnerable to any rise in interest rates, would preclude the early adoption of less stimulative monetary policies.
September 5, 2013
In recent weeks, gold prices have been on a wild rollercoaster ride, lurching one way then the other, driven mostly by uncertain and highly volatile expectations – expectations about the likelihood and possible consequences of U.S. military intervention in Syria as well as expectations about prospective U.S. monetary policy as the next Federal Reserve policy-setting meeting (September 17th-18th) draws near. With events in the Middle East remaining uncertain, with Russia’s own diplomatic offensive leading to who knows where, and with the next Federal Reserve Open Market Committee closing in, we expect the rollercoaster ride to continue – but it remains unclear whether we are heading higher or ready to take another fall.
August 28, 2013
Gold has traded today in New York from a low just under $1415 to a high just over $1435. So far this month it is up by some 8 percent — its biggest monthly gain since January 2012.
In recent days, gold’s strength has reflected Syrian-inspired safe haven demand with an important assist from technical and momentum traders as shorts covered and some longs increased their bullish bets.
The magnitude of the move is an indicator of market tightness and confirmation that much physical gold has moved from weak hands in Western markets to strong hands in Eastern markets.
In the past, safe-haven demand inspired by geopolitical events and anxieties has tended to evaporate — unless the crisis or events that triggered gold’s advance continue to worsen.
August 22, 2013
Long constrained between $1,180 and $1,300 an ounce, gold has finally broken out on the upside, only to find itself trading within a new, albeit higher, range. Gold now enjoys a “floor” of solid support at $1,300 with initial support kicking in around $1,340. On the upside, initial resistance kicks in around $1,385 and continues up to the psychologically important $1,400 level – but, as outlined below, this “ceiling” could prove vulnerable in the weeks ahead.
August 16, 2013
There was a time when price stability and well-behaved indicators of inflation would send gold prices lower. After all, many investors and savers typically buy and hold gold as an inflation hedge. With little inflation in sight, prospective buyers would not be expected to stock up on the yellow metal . . . and some might even wish to reduce their bullion holdings.
Uncharacteristically, today’s (Tuesday’s) news that U.S. producer prices were flat in July sent gold prices up more than $12 an ounce in New York trading.