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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 ...

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 ...

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 ...

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 ...

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 ...

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 ...

Interest Rates, Fed Policy, and the Price of Gold

Traders and investors around the world are placing bets on whether or not the U.S. Federal Reserve, America’s central bank, will soon raise short-term interest rates given the continuing ambiguity in U.S. and global economic indicators and continuing volatility in world financial markets. Some days there seems to be a consensus in the marketplace expecting the Fed will stand pat, leaving short-term interest rates unchanged for a while longer. Other days the consensus seems to expect the Fed will sooner or later nudge rates up a tad, possibly voting to do so as early as next week’s FOMC ...

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, ...