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Gold: Wall Street Versus Main Street

At recent lows around $1075 an ounce, gold has been trading at the lowest price level since February 2020. And, in recent days, the metal has been consolidating in a narrow range just under $1100. Now, it looks to me like gold is poised to break out one way or the other – but the question remains “Which way?” The answer may depend on some exogenous “outside the market” development, possibly a sharp sell-off in world equity markets or a spate of negative economic indicators making it less likely the Fed will raise interest rates this autumn as most pundits expect. Gold may be out of ...

Gold: Asia to the Rescue

I’m just back to my desk from a fact-finding mission to Shanghai and other Asian gold-trading centers where I met with gold importers, traders, jewelry manufacturers, retail outlets, and exchange officials. The key take-away: Just as weakness in Asian markets may have contributed to the latest gold-price slump, an imminent recovery of physical demand across the region could be the catalyst to higher prices later this year. While demand throughout the region has been soft for over a year now, most major players we met with expect at least a gradual recovery in gold demand – and, hence, ...

Gold: Watching the Fed

The U.S. economy has rebounded from its winter slump – but recent data continue to present mixed signals, leaving the Federal Reserve and most Fed-watchers alike uncertain about the timing of the much-anticipated first step-up in the Fed funds interest rate. One thing is for certain: The gold market and other financial markets already expect the coming hike in interest rates later this year – and anything else could prove to be a plus for gold. Regardless of the timing – September, December, or sometime next year – we do know for sure, barring a setback in economic growth, the Fed will ...

Gold: Now is the Time

If investors ever needed physical gold in their portfolios, now is the time. Now is the time to protect even a well-diversified portfolio against the risks inherent in financial assets (equities, debt) and tangible assets (real estate, fine art, etc.) alike. Here’s some reasons why: If you hadn’t noticed, geo-political uncertainties are at a high pitch, what with failed states (Iraq, Libya, Syria) and terrorist victories in the Middle East, East-West Russian roulette in Central Europe, and rising tensions between the United States and China as the PRC seeks to extend its territorial ...

Gold: Range-Bound for Now

In the short term, perhaps through midyear or longer, gold prices will likely remain “range-bound,” trading mostly between a floor price of $1175 and a ceiling around $1225. As these boundaries are approached or briefly broached, technical traders will continue to step in as buyers or sellers, respectively, keeping the yellow metal’s price relatively stable within this range. However, a reassessment of economic prospects – and revised financial-market expectations of Fed policy – sometime in the next few months could support a spring-summer recovery in the price of gold, lifting the ...

Waiting for the Start of Something Big

We've said it before, but its worth repeating:  A reassessment of U.S. economic prospects – and revised financial-market expectations of prospective Fed policy – sometime in the next few months could support a spring-summer recovery in the price of gold, lifting the yellow metal up and out of its recent trading range.   Until that happens, gold prices will likely remain “range-bound” in the short term, perhaps through midyear or longer, trading mostly between a floor price of $1,175 and a ceiling around $1,225. ...

Gold: Stuck in the Mud . . . But For How Long?

A reassessment of economic prospects and Fed policy in the weeks and months ahead could be just the turn of events that will support a springtime recovery in the price of gold, lifting the yellow metal up and out of its recent trading range.   Gold prices have been stuck in the mud, trading in recent weeks mostly between $1,175 and $1,225 an ounce. Unless some “outside-the-market” surprise comes along to push gold one way or the other, the yellow metal could remain range bound for weeks to come. Meanwhile, short-term fluctuations within this $50 an ounce trading range will continue to be ...

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Economic Growth, Fed Policy, and the Price of Gold

From day to day and week to week, short-run fluctuations in the price of gold have, of late, been driven almost entirely by expectations of prospective Federal Reserve monetary policies, particularly with respect to short-term interest rates. In turn, these expectations have been driven by the flow of economic data and the somewhat opaque and contradictory comments by one or another Federal Reserve official. Here’s what’s going on: Signs of an improving economy lead the gold and financial markets to expect the Fed will begin raising interest rates sooner rather than later – a negative ...

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Think Long-Term

Although I expect gold prices to rise sharply by the end of the year, possibly even testing its all-time high near $1924 an ounce, I’m the first to admit that short-term forecasts are highly uncertain. I’m much more confident about the long-term prospects for gold. Indeed, looking out towards the end of the decade and beyond, I believe the metal’s price will rise to a multiple of the currently prevailing price. ...

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The Dollar Reigns Supreme . . . But For How Long?

Having failed in its attempt earlier this month to move above $1,300 an ounce, gold is once again looking for sustainable support under the technically and psychologically important $1,200 level. How quickly things can change in world financial markets: Just a few weeks ago it looked like gold might break-out on the upside on the back of bullish geopolitical and global economic developments – and establish a new floor price around $1,300 an ounce. But, having failed in its attempt to move up, we now wonder (along with what must be a majority of gold-market analysts and participants) if gold ...