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GOLD: Sound & Fury . . . But What’s It All Mean?

Gold-price volatility so far this year has been a reflection of short-term speculative activity by a relatively small group of hedge funds and other institutional traders taking relatively large positions in “paper” markets.   In paper markets, no physical gold actually changes hands.  Instead, trading of futures and forward contracts, as well as other IOUs between large dealers and traders, governs much of the short-term day-to-day (and even more so much of the intraday) price fluctuations. Meanwhile, “physical" demand continues to grow over time — with buying from the gold-friendly ...

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2015: A Very Good Year for Gold

After some three years of disappointment, 2015 promises to be a good year for gold investors. While the near-term price outlook remains uncertain, I feel fairly confident that gold will be considerably higher at this time next year – and on its way to new historic highs in the years ahead. A number of factors, some interrelated, will drive gold higher. ...

Gold: Any Day Now . . .

Any day now, gold could find itself in a sustainable long-term uptrend – or not. What remains true is that near-term gold-price prospects remain uncertain with the continuing possibility of sizeable price moves in either – or even both – directions. What also remains true is the high probability that the yellow metal’s price will be considerably higher at this time next year – with a sustainable long-term upswing already underway. ...

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Gold: Short-Term Risk vs. Long-Term Opportunity

Autumn has been a cruel season for gold investors. In contrast to some anticipated seasonal bump up, the yellow metal’s price has been driven lower by bearish technical indicators and excessive negative sentiment among a small number of large-scale institutional speculators – bullion banks, hedge funds, program traders and the like – trading mostly in futures and over-the-counter “paper” markets for very short-term gains while remaining indifferent to the metal's long-term bullish fundamentals. Despite this dismal performance and continuing bearishness among many traders, gold should still ...

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GOLD: Balancing on a Knife Edge

It’s time to fess up:  Over the past week or two, I’ve been reluctant to say much about gold’s short-term price prospects.  Now, it seems to me that prices are set up for a big move . . . but in what direction?  That is the question. Gold markets can no longer count on rising geopolitical risk to gin up prices.  Lately, gold has largely ignored the myriad of risks that occupy the daily headlines.  Significant events attract some brief attention and a short-lived bump in safe-haven demand for a day or a week with briefly spurting higher before giving up any gains. If geopolitical events ...

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Back from Vacation: The More Things Change . . .

I’m just back from a two-week vacation from the gold market.  In the interim much has changed – especially the metal’s price, which has fallen some $65 to $75 an ounce.  That’s more than five percent – but no reason to despair! While the price has weakened, the metal’s fundamentals, fundamentals we have discussed in past reports, have continued to improve, so much so that some bounce-back now seems likely – with bigger gains due later this year. ...

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Gold Insights on Recent Price Action

The past few weeks have been trying times for gold investors.  In mid-March, just when it looked like gold prices were set to break out into higher territory, the market shifted into reverse, leaving many investors and analysts wondering what was going on. To put some numbers on it, at its recent low point, gold was off some eight percent from its mid-March six-month high – and is continues bouncing around within the technically significant $1265 to $1305 range.  A breakout in either direction could set the market’s tone for the weeks ahead. That said, we’ve never put much faith in ...

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Gold-Price Weakness: More March Madness?

Frankly, I’ve been surprised by the recent decline in the price of gold.  I expected a stronger finish to the first quarter with gold prices somewhat higher – possibly even breaking out above the $1,400 an ounce level by the end of March. Instead, gold prices have softened considerably over the past couple of weeks – off nearly $100 an ounce from its mid-March highs and down three percent in just the past week.  On a more positive note, gold is still up 7.5 percent for the year to date. With gold now hovering around the 200-day moving average and short-term momentum now moving into ...

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Russia Drives Gold

Russian saber-rattling sent gold over $1,350 an ounce earlier this week, its highest price in four months.  But, contrary to many press reports, it was neither safe-haven demand nor physical buying that fueled gold’s short-lived price advance. Instead, it was institutional speculators and short-term traders – among them the trading desks at some of the gold-dealing banks – who rushed reflexively to buy gold futures and other “paper gold” derivatives . . . and then sold quickly to take profits as the crisis seemed to abate.  Meanwhile, buyers in China and India, the two largest physical ...

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India Gold: Hot Curry on this Year’s Menu

In this “NicholsOnGold” commentary, we take a look at the gold-market situation and outlook for India, long the world’s biggest gold-importing country. The precipitous fall in gold imports during 2013 – from an annual rate of roughly 1000 tons per month early in the year to an annual rate of only 250 to 300 tons late in the year – was a powerful negative influence on the metal’s price in world markets during the past year, its impact on price being both physical (in terms of the overall global supply/demand situation) and psychological (in terms of investor sentiment). A relaxation of ...

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