Subscribe FOR ALL ACCESS TO Nichols On gold
Follow Us on Twitter @NicholsOnGold.com

Gold Slumps as Wall Street Soars

With the Dow topping 16000 and the S&P500 index reaching 1800 – both psychologically important levels – gold continues to be an innocent victim of the frenzy on Wall Street. Trading around $1245 an ounce the metal’s price is off some 25 percent from the start of 2013 and is 35 percent below its September 2011 all-time high. Reflecting the super-stimulative monetary policies currently pursued by the U.S. Federal Reserve, the Bank of Japan, and the European Central Bank, U.S. and world equity markets are achieving new all-time highs as more and more investors jump on the stock-market ...

Please Login or Subscribe to view this Commentary.

Gold Market Update

Although continued “uncertainty” and “caution” remain the gold market’s watchwords, the odds favor further gold-price recovery in the weeks and months ahead -- despite continuing attempts by large-scale speculators and institutional traders,  driven by computer models and momentum indicators, to knock gold prices lower. For the moment, we believe gold prices are still in a “bottoming phase” and may have more work, technically speaking, around recent levels before breaking through overhead resistance and moving substantially higher.   ...

Please Login or Subscribe to view this Commentary.

Gold Market Tightens Signaling Possible Price Recovery

Gold hit a fresh three-year low of $1,180 per ounce in late June. By early July the metal's price had struggled back to the $1,240 to $1,260 range.  Although the most recent decline began back in April, the sell-off accelerated in June, just moments after Fed Chairman Ben Bernanke's statement that the U.S. central bank might soon taper off its program of quantitative easing. Yesterday (Wednesday, July 10th) Chairman Bernanke put that notion to rest, at least for now, and gold quickly shot up some $50 an ounce briefly trading over the technically and psychologically important $1,300 level. ...

Please Login or Subscribe to view this Commentary.

Time for Contrary Thinking . . . and an Asset Allocation Adjustment

Sentiment in the gold market - especially among the hedge funds and institutional speculators - is already EXTREMELY NEGATIVE.   Market psychology can't get much worse.  Even the gold bugs are dumbfounded.  But, contrarians say this unbalanced situation could be signaling an approaching upturn in prices. The downward pressure on prices emanates from two distinct sources of selling:  First, trading by the gold dealing firms and institutional speculators in the regulated futures markets and the unregulated over-the-counter markets often guided by complex computer algorithms.  These are the ...

Please Login or Subscribe to view this Commentary.

Dark Pools, Program Trading and the Decline of Gold

Day after day, gold trading has been, and continues to be, dominated by institutional trading in the "dark pools" where over-the-counter dealer and interbank activity goes largely unseen. Don't under-estimate the influence of trading in the dark pools where "invisible" institutional trading can - in a flash - knock gold to the mat, leaving most gold-market participants and observers wondering what happened. Indeed, much of this activity in the interbank and dealer market goes unreported - but buy-sell transactions, high-frequency, and other program trading in these dark pools, often at ...

Please Login or Subscribe to view this Commentary.

GOLD: Where’s the Mojo?

Just when many gold-market participants and observers thought it safe to wade back into the long side of the market, the metal has taken another dive. Having begun 2013 near $1,650, gold prices are now off about 15 percent for the year to date and some 25 percent from its all-time high just over $1,920 in September 2011. A number of writers have already declared the end of gold's decade-long bull-market run. And, even some of the most outspoken gold bulls are worried that the yellow metal has lost its mojo. Having failed to build upon the nascent upward momentum and unable to move back ...

Please Login or Subscribe to view this Commentary.

GOLD — Confounded by the Machines and Dark Pools

Gold continues to confound, dropping another $25 an ounce this morning as technical and computer-driven program trading triggers selling on U.S. derivative markets, all despite favorable fundamentals and what should be seen as favorable economic and geopolitical developments. Gold Lower Despite Bullish News This morning's dispatches from India and China, the two biggest gold-consuming nations, report that demand in these markets continues unabated . . . and coin dealers report still-strong retail demand for bullion coins and small bars in the Western markets. News from the Middle East -- ...

Please Login or Subscribe to view this Commentary.

Monetary Policies Favorable for Gold-Price Recovery

Global financial markets will be taking their cues from U.S. Federal Reserve and European central bank policy meetings to be held by the Fed on Tuesday and Wednesday and by the European Central Bank (the ECB) on Thursday. The consensus among economists who pay attention to these things suggests there won't be any significant change in Fed policy . . . but, in contrast, there is a strong belief that the ECB will cut European interest rates from their already record low levels. ECB Expectations The ECB has seen a disappointing string of European economic data over the past several weeks. ...

Please Login or Subscribe to view this Commentary.

QUICK MARKET COMMENTARY

Despite further gold ETF liquidation in recent days and some short spec selling on futures exchanges, gold prices are moving higher on unrelenting physical demand for small bars, coins, and jewelry from the gold-friendly Asian markets as well as retail investment demand in US and European, especially for gold (and silver) bullion coins. It is particularly encouraging to see gold move higher despite the stronger dollar (against the euro and yen, for example) . . . and at a time when equities are moving lower (or at least are not moving higher). In the past year and a half, the continuing ...

Please Login or Subscribe to view this Commentary.

Macro-Economics and the Future Price of Gold

The future price of gold will likely reflect a wide variety of prospective developments.  That's what makes gold so interesting . . . and so difficult to predict. The intensity of private-sector demand in China, India, and elsewhere in Asia is high on my list of gold-price influencers. Similarly, the magnitude of net central-bank reserve acquisitions will almost certainly play an important role. So too could the unfolding economic and political situation in Europe. Alternatively, gold prices may wind up hinging most of all on some black swan or unpredictable event in the ...

Please Login or Subscribe to view this Commentary.