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Interest Rates, Inflation, and Trumpian Troubles Point Up for Gold

Gold prices of late have been testing support just under the market, if you will, preparing for a healthy rally into higher territory. As I see it, a relatively small group of hedge funds and institutional speculators have been calling the tune for gold, trading the recent range, buying on dips, selling on rallies, and gradually adding to their physical holdings – a behavioral pattern we expect will continue within a rising trading range – at least until a price well above the $1300 an ounce level is well established. Contributing to support under the market, price-sensitive Asian ...

Flash Crash?

Gold has once again surprised. This time, news from “outside the market” set in motion a chain reaction that knocked gold for a loop. First, the British confirmed the country was withdrawing from the European Union . . . and sooner than most had expected. This triggered an instant devaluation of the British pound and a corresponding rise in the U.S. dollar in world currency markets. Not surprisingly, as the dollar rose, gold took it on the chin, as it most often does when the U.S. currency appreciates. At the same time, contributing to the dollar’s recent appreciation has been a ...

My Recent Interview with Mine.com

I recently sat down with Mining.com to talk about gold and the outlook for the yellow metal.  Here's a summary of that conversation:   Jeffrey Nichols has been a precious metal economist for over 25 years, so if there’s someone who knows every nook and cranny of the gold market, that is him. Like many others, including American lawyer and author Jim Rickards and RBC Capital Markets, he has been predicting that the price of gold is going rise before January 1, 2017, especially taking into account that it has been up by 25% for the past six months. “This is far better than the major ...

What’s Driving Gold — It Ain’t Interest Rates

Although gold prices have had some difficulty sustaining recent gains above the $1365 per ounce level, the metal has nevertheless registered just about the best performance across virtually all investment classes over the past six or seven months. Over the past half year, the metal has rallied some 25 to 30 percent – far better than the major stock-market averages that have received more favorable attention from the financial press for reaching new all-time highs. The reason I mention this is that gold has been trading inversely to equities – and, consequently, the yellow metal stands to ...

Founding Fathers Liked Gold

To be sure, more than a few of our nation’s Founding Fathers owned gold and silver coins to preserve wealth at a time when paper currency wasn’t worth a Continental. Washington, Adams, Jefferson, Hamilton, Franklin, and Madison, each likely held gold coins as a form of saving and to preserve wealth during years of high inflation. And they all, each and every one of them, while distrustful of paper currency, believed there should be a role for gold in the young nation’s monetary and banking system. Alexander Hamilton, the nation’s first Secretary of the Treasury under President ...

The Gold Bull Begins to Stir

These days I am feeling very bullish on the prospects for gold – and I would not be surprised to see prices double or possibly do even better over the next three-to-five years. Moreover, there is even some chance gold prices will break into record high territory (exceeding $1,924 an ounce) later this year or next. I expect that the U.S. and other major economies will perform poorly for several years to come with recession or near-recession business conditions forcing the Fed and other leading central banks to pursue reflationary monetary policies and low interest rates – a bullish ...

GOLD: RECOVERY INSIGHT

Despite increasingly strong supply/demand fundamentals, gold prices continue to tread water – more or less within a narrow $100 range – having hit overhead resistance a few weeks ago near $1175 and now testing support near $1075 an ounce. For the past year or two, financial-market expectations of U.S. Federal Reserve interest-rate policies – driven by the day-to-day flow of economic news and pronouncements by various Federal Reserve officials – have been the single-most important determinant of day-to-day fluctuations in the price of gold and the longer multi-year correction in the metal’s ...

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: Sound & Fury . . . But What’s It All Mean?

Gold-price volatility so far this year has been a reflection of short-term speculative activity by a relatively small group of hedge funds and other institutional traders taking relatively large positions in “paper” markets.   In paper markets, no physical gold actually changes hands.  Instead, trading of futures and forward contracts, as well as other IOUs between large dealers and traders, governs much of the short-term day-to-day (and even more so much of the intraday) price fluctuations. Meanwhile, “physical" demand continues to grow over time — with buying from the gold-friendly ...

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Gold: Pregnant with Possibility

This year, 2015, could be the year for gold to shine. Having recorded its all-time high above $1920 an ounce in September 2011, the metal has been in decline now for nearly three and a half years and, consequently, its allure as a reliable hedge asset and store of value has been tarnished. But while gold as been scorned by many Westerners – principally American and European institutional investors and short-term speculators – it has remained in favor most everywhere else. Long-term investors and savers across much of Asia – especially China and India, by far the largest and most ...

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