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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: On the Verge . . . or Nearing a Cliff

Gold has had difficulty sustaining recent rallies and remains trapped in a $50 trading range.  At the lower end, incremental physical demand has so far kept the price above its recent floor around $1175 an ounce . . . but selling by funds and other institutional traders of gold ETFs and “paper” proxies has limited attempts to rally. Whatever improvement in sentiment and upward momentum that may have resulted from this year’s encouraging first-quarter start has now dissipated.  The longer gold lingers in its current range the more difficult it will be for the yellow metal to break out on the ...

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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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The Russian Bear – Bullish for Gold

So far, the gold market has largely ignored the East-West clash over Ukraine and control of Crimea. With gold recently trading mostly within the $1,340–to-$1,350 range, we’d guess the Ukraine/Crimea crisis has added no more than $10 or $15 an ounce to the yellow metal’s price.  But there is the potential for larger, more dramatic price movement in the weeks ahead. For the next few days, world financial markets will be anticipating the March 16th referendum in which Crimea will likely vote to secede from Ukraine and join the Russian Federation.  While this may already be reflected in the ...

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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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