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Surprise, Surprise!

Despite last week’s move by the U.S. Federal Reserve, America’s central bank, to tighten monetary policy a notch, gold prices surprised many observers of and participants in the gold scene who had expected the quarter-point increase in short-term interest rates would be sufficient to knock the metal into a still-lower trading range under $1,200 an ounce. After all, higher interest rates are widely perceived as a negative or bearish influence on the gold price. But, as noted below, it is really the “notional” real “inflation-adjusted” rate of interest, that matters, not the “nominal” rate as ...

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 ...

Gold: Faulty Expectations

Contrary to expectations, ours and nearly everyone else’s who pay attention to the price of gold, the yellow metal has, since Election Day, shed nearly 15 percent of its value in U.S. dollars. According to the pundits who pay attention to such matters, the election of Donald Trump should have pulled the rug out from under stock prices, hammered the dollar against other major currencies, and propelled gold sharply higher. But once again the pundits have been proven wrong: Stock prices on Wall Street have zoomed to new historic highs and gold has, once again, disappointed. Despite this ...

The Prospects for Gold: Does the Election Really Matter?

Regardless of who moves into the White House this coming January, gold prices are set to zoom in the years ahead – in my view, more than doubling during the next President’s term. What many Western investors – particularly Americans – still fail to realize is that investment demand for gold knows no boarders. Indeed, it will be the growth in physical demand for gold – from India and greater China – that drives gold prices to unheard of heights over the next several years. Political and social developments – especially the growth in middle classes with investible incomes in these ...

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 ...

Gold and the Interest-Rate Dis-Connect

I don’t like to make short-term predictions about the price of gold – people who do are usually very lucky or very wrong. But times they are changing . . . and we are entering a new phase in gold-price action where expectations of Fed interest-rate policy will become less important and other, more bullish, gold-price drivers come to the fore. Just look at the past few weeks or even, for that matter, the past year: The day-to-day, week-to-week, fluctuations in the price of gold have been almost entirely a reflection of the gold-market’s expectations of prospective Federal Reserve ...

Gold: Day of Reckoning Ahead

Although the price of gold is up some 25 percent so far this year, the metal still remains 30 percent below its all-time high of $1,924 registered in September 2011 – so there’s still plenty of room overhead for the price of gold to move higher – as I think it will – without excessive resistance. I’m no gold bug – but I have been “super bullish” on gold for the past few years. Now, I think the yellow metal’s day of reckoning is quickly approaching. A decisive break above $1,400 an ounce could be just around the corner – and, to my mind, would signal the start of gold’s next major ...

Gold: More About the Outlook

You wouldn’t know it reading the Wall Street Journal, Bloomberg’s, or the other popular investment news sources . . . but thus far this year gold prices are up some 15-to-20 percent, making the yellow metal just about the top-performing investment asset class of 2016. We expect gold will continue to be one of the best – if not the best – investment-asset class in the months and years ahead. In fact, by this time next year, gold prices could challenge or even surpass their all-time high of $1,924 an ounce reached briefly in September 2011. And, as outlandish as it may seem, gold could ...

Gold — Pregnant with Possibility

  Despite gold’s recent sell off, I feel increasingly comfortable with our short-term (one-year) and our long-term (five-to-seven year) forecast of the future price of gold. Indeed, by this time next year, gold’s price could be challenging or even surpassing the yellow metal’s all-time high of $1,924 an ounce reached in September 2011. And, looking further out, by the end of the current decade, gold could double ($4,000) or even triple ($6,000) its previous all-time high. This bullish forecast does not depend upon some global economic crisis, financial-market meltdown, or ...

Wall Street Matters

Gold bulls have suffered years of disappointment, having seen their favorite metal’s price lose more than 40 percent from its all-time historic high of $1,924 an ounce in early September 2011. Last year alone the price of gold fell some 10 percent, leaving many investors, analysts, and financial-market pundits despondent about the prospects for gold in this New Year. What surprised us more than anything was the failure of extreme monetary stimulus from the U.S. Federal Reserve and other major central banks around the world to trigger and support a bull market in gold. Common sense ...