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Today’s private-sector ADP Payrolls Report said 215,000 jobs were added in the US last month, against consensus forecasts of 173,000. Rising ahead of that number, used by some as an advance guide to Friday’s official US non-farm payrolls figures, gold had then fallen $5 per ounce before jumping 0.9% in volatile trade. Gold “[had] hit a fresh 5-month low in every session this week,” says the Reuters newswire.
Why is the gold price dropping even though the dollar is losing value?
The short term trend is confirming the longer term downtrend. The daily charts show an almost perfect trendline since November 2012. Apart from the trendline, the daily charts reveal two other important things. First, both gold and silver are about to retest their June lows. Needless to say those price points are of major importance. In case they would hold, it could turn out to be very bullish for the metals. However, if support would fail, the odds favour a break through.
In this interview with Dimitri Speck, the gold price suppression scheme of the last 2 decades is discussed. In terms of gold’s outlook, the most likely scenario is one comparable to the current Japan: suppress deflation, stimulate slight inflation while avoiding strong inflation. In this scenario, the velocity of money will increase, savers will step out of the banking system, inflation will occur in asset and consumer prices. Gold is the best hedge in such a scenario.
There are so many pieces to the entire puzzle, and for all the known ones, those which are most important are unknown to the great majority. All one can do is to continually monitor events and prepare accordingly. The best predictor of the future has always been past behavior. For centuries, the most reliable preparation has been the ownership of gold.
What to make of the current trend in the price of Gold?
In today’s shaky economic climate, investing in gold is one of the few reliable things you can do. However, it is vital to your wealth and profits that you monitor the price of gold carefully, to stay on top of new trends. By doing so, you will discover that, lately, the price of gold and silver have been going down while the value is going up. A strange phenomenon, but important to imporant the underlying drivers.
Why is the gold price going down while commentators and analysts say that the value of gold is rising? How can that be?
That is a great question, and a critical one to reply in an accurate way. The answer to that question is based on the monetary aspect of gold. The fundamental value of gold as a hedge against the destructive monetary policies of the central banks in the west. Meantime, traders and investors have decided to search for profits in the equity markets; they have been selling the metals lately. That explains the disconnect between gold as an investable commodity versus gold as a hedge against monetary destruction.
By following the articles we publish at GoldSilverWorlds.com you can follow this trend and stay up to date on the latest market developments. Through our many years of experience and research, but also our extended network of experts that are behind GoldSilverWorlds.com, we are able to provide a wealth of valuable information, Be sure to check out the current gold price and read our latest articles analyzing the gold price. They provide accurate and well researched insights.
Last update: May 2013