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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 Bulls: Take Comfort in the Long Term

Last year’s big surprise in the world of gold was the failure of prices to move higher. Even strong physical demand for the metal and election-related uncertainties following Trump’s surprising victory could not underpin a sustainable rise in the price. Instead, expectations of higher interest rates, an appreciating dollar, and record-high equity prices held the yellow metal down. Now, it seems gold may have finally turned a corner . . . with prices for the yellow metal beginning their long march upward, a long march that will eventually carry the metal to new historic highs. But, even ...

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 ...

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 ...

A Quick Note on Gold Price Prospects

We are advising clients and subscribers to NicholsOnGold to expect another up-week for gold . . . driven largely by geopolitical anxiety over the conflict between Russia and Ukraine and the likely outcome of Sunday’s referendum on the future of Crimea. ...

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