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GOLD: TREADING WATER

One big surprise in the world of gold thus far this year has been the metal’s lack of price volatility. This despite: All the uncertainty associated with a new, and somewhat maverick, president in the White House compounded by a dysfunctional and highly political Congress, The coming withdrawal of Britain from the European Union and the possibility the French will follow suit by pulling out of the EU too, The rising tensions between Russia and the United States on two fronts (Ukraine and Syria), And, most recently, rising North Korean bellicosity, the real possibility the ...

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 ...

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 ...

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 ...

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 ...

Gold: Stuck in the Mud . . . But For How Long?

A reassessment of economic prospects and Fed policy in the weeks and months ahead could be just the turn of events that will support a springtime recovery in the price of gold, lifting the yellow metal up and out of its recent trading range.   Gold prices have been stuck in the mud, trading in recent weeks mostly between $1,175 and $1,225 an ounce. Unless some “outside-the-market” surprise comes along to push gold one way or the other, the yellow metal could remain range bound for weeks to come. Meanwhile, short-term fluctuations within this $50 an ounce trading range will continue to be ...

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The Fed Tapers and Gold Topples

Surprised?  So am I, both by the Fed’s decision, announced this past Wednesday, to taper back its easy-money policies of the past year . . . and, even more so, by the subsequent fall in gold and silver prices. In fact, Federal Reserve Board Chairman Ben Bernanke surprised many investors, traders, and analysts, announcing the Fed would cut back its monthly asset purchases by a relatively modest $10 billion in January – and continue “in further measured steps” if the economic recovery stays on track. To understand my own expectations ahead of the Fed announcement, read my last commentary ...

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Gold This Week — Eyes on U.S. Monetary Policy

Precious metals and the broader financial markets continue to react to the latest economic news, both statistical and political, with traders and investors guessing how each new bit of information on the economy may affect the Fed’s decision – when and by how much – to cut back, or taper, its $85 billion per month bond-buying program. It has become the accepted wisdom of the markets that rosy economic prospects increase the odds that the central bank will choose to begin tapering sooner rather than later . . . and expectations of reduced monetary stimulus have been one of the key bearish ...

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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.   ...

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