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GOLD: STILL VULNERABLE

Gold's tumble in recent days, now about 9.5 percent from its late-February high just briefly over $1000 an ounce, is no surprise to readers of NicholsOnGold.com.  Although we remain bullish for the long-term and foresee more than a doubling of the gold price in the next few years, the immediate picture is less rosy . . . and the yellow metal remains vulnerable to further short-term selling. A number of factors have contributed to gold's decline in the past week and may remain influential in the weeks ahead: •    First and foremost, the market has had to absorb an absolutely fantastic ...

NO SURPRISES

Gold's retreat in recent days from its brief flirtation last week over $1000 an ounce was no surprise.  We warned in recent posts that the surge in secondary supply, particularly from Asian and Mideastern markets, and the worldwide collapse of fabrication demand left the price vulnerable -- and an easing of investor interest could bring a sizable correction in the yellow metal's price. Moreover, when everyone seems to be jumping on the gold train, nary a bear is to be seen, bulls are uniformly revising upward their price forecasts, and the financial press suddenly gets all hot and bothered, ...

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Bipolar Gold

With the price of gold lurching first one way then the other, it looks like the market has been suffering from bipolar disorder.  I expect this split-personality behavior, characterized by extreme price volatility, to continue for some time to come with big swings up and down -- but, importantly, around a rising trend with support levels moving up step-wise over time. In short, gold is heading much higher, but not without more struggle and occasional disappointment for those looking for a speedy ascent.  Further out -- over the next year or two -- I have no doubt that gold will move to new ...

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The World Economic Crisis and the Outlook for Gold

The World Economic Crisis and the Outlook for Gold Speech to the 3rd Annual China Gold & Precious Metals Summit Shanghai, China Thank you Mr. Chairman for that flattering introduction and thank you to the conference organizers who have made it possible for us to exchange information and insights into the future of gold here in China and in the global marketplace. You should know that my presentation today will be posted on my website, NicholsOnGold.com, so you can easily check back in a few days, or a month, or a year – to review my analysis and my expectations for gold. A few ...

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The Deflation/Inflation Conumdrum

Gold was bound to rise once the selling abated . . . and each day it remains in $800+ territory, the technical picture and the yellow metal's good fortunes improve. ...

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GOLD — Deflation Hedge?

Gold's relative price strength in recent days -- in the face of plummeting U.S. consumer and producer prices, declining prices for oil and other (non-precious metals) commodities, and lower multi-year lows in world equity markets -- suggests that the yellow metal, technically speaking, may be building a solid base in the $770 to $800 range from which to embark on a sustainable advance into higher territory. Interestingly, gold has been outperforming silver and the PGMs, suggesting that investors and traders are differentiating among the metals, favoring gold as a monetary asset, safe haven, ...

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GOLD — Nearing a Turning Point

Despite gold's latest weakness and the possibility of further breakdown, I believe we are nearing a turning point in the tenor and direction of the market.  Before long, gold will begin a new and sustainable upward march. Until then, with the yellow metal in the $700 to $730 range - and certainly at lower price levels - price-sensitive demand from key Asian and Middle Eastern markets should stabilize the market. With $1000 gold very likely in the next year - and still higher prices beyond - the risk/reward ratio is very much skewed to the plus side. Commodity Disinvestment Running Its ...

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Gold Near $800

Gold near US$800 remains vulnerable in the near term to a stronger dollar but is underpinned by rising physical demand in key global markets, deteriorating macroeconomic and financial environments, accelerating inflation, and tight supply/demand fundamentals. A pop in the U.S. dollar, prompted by signs of deteriorating economic activity in Europe, has once again undercut gold, just as the metal looked like it might hold and build support around $830 an ounce. Having failed to establish a foothold over $830 an ounce, gold is greatly oversold but still looks technically vulnerable.  A ...

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Gold — After the Fall

Despite this morning’s sharp sell-off in precious metals, the key factors favoring gold, silver, and the platinum-group metals remain in place. Gold, in particular, has been acting much like a currency, reacting negatively to strength in the U.S. dollar in recent weeks, just as the depreciating greenback early this year was mirrored in gold’s swift run-up into four-digit territory.  And, the short-term outlook – for the days and weeks ahead – still depends very much on the fate of the U.S. dollar. Both big moves – first up to US$1034 and then back down to the $850 vicinity –reflect, in ...

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