The end of QE is bullish for the Dollar. Note that the Fed has ended QE and the European Central Bank is threatening QE. This is Dollar bullish and Euro bearish. The US Dollar ETF held its support zone and surged to affirm support at 22.60. Gold gave us a little preview of the Fed policy statement by breaking down last week. This break held as GLD consolidated in the 118 area. GLD continued lower after the Fed announced the long awaited end to quantitative easing, which is Dollar bullish and bullion bearish. I will not move key resistance to 119.
Tag: economic analysis
Bitcoin’s correlation with gold has started to reverse, moving to +0.76 from a high last week of +0.88. This makes forecasting future bitcoin price movements more difficult if it is beginning to act less like gold, who’s behavior has become well-understood in relation to the US economic narrative of growth and Federal Reserve tightening. Right now, the bitcoin market remains very stochastic and open to market manipulation. There are no clear demand-side factors that we can rely on for sustained demand of the currency.
The damage being done to the world economy has no precedent. The extent to which the world is being manipulated has no precedent. The degree of endless “wars” engaged in and provoked by the United States in has no precedent. The amount of worthless “currency” being used by the moneychangers to fleece the world of its wealth does have a precedent in the Rothschild formula, but the degree to which it has been utilized has no precedent. One day, and it is a certainty, the value of gold and silver will double, triple, or some unknown multiple of current suppressed values, and those who have been bemoaning the current prices will be equally rewarded as those who have kept the faith and knew that it was just a matter of time.
It’s hard to argue that high debt levels are deflationary. And with the current expansion based largely on debt, we can’t expect sustainably higher economic activity to be generated. So what happens if deflation wins? Even if we eventually get inflation, what happens to our gold investments if we first go through a deflationary bust?
This microdocumentary video examines in detail 4 major booms in the last 100 years and explains how monetary policy and interest rate manipulation has led to the inevitable bust.
Current data on the world’s economies is mixed. There is both positive and negative news about developed and emerging markets but many investors – particularly in the US – are optimistic about a return to growth. Conventional wisdom says this will be bad news for gold. We believe the true picture is more complex. Gold benefits from both the growth and contraction phases of the business cycle, and our analysis, based on new third-party research, highlights the positive link between economic growth and consumer demand for gold.
As long as the markets continue to believe that the world, specifically the US, is in full economic recovery and higher interest rates are just around the corner, gold will remain under pressure. Personally, I think the downside is limited and we are getting close to a bottom of this cycle. My message here is that while you have many reasons to sell your gold, don’t. Gold is now on sale, and everyone wants to buy valuable assets when they’re cheap. Bullion’s current dip is a golden opportunity to buy low in order to sell high later.
The names of the programs change over time, but in essence the outcome is the same: injecting more money into the system. It is our understanding that we have more uncertainties today than a few years ago. This is also the reason why we believe that the global economy will not see a positive development in the years ahead. Holding parts of one’s wealth in physical gold and silver, stored outside the banking system, never made more sense.
If you want to know why your holdings of physical gold and silver have remained under suppression, it is because both are anathema to paper fiat currencies, and the ones who are in control, the moneychangers, will not tolerate competition against their fiat Ponzi monopoly scheme. Not until the elite bankers lose control of the fiat US “dollar” can you expect to see dramatic price increases for gold and silver, irrespective of any and all fundamentals and more widely recognized efforts of manipulation.
While I still believe unequivocally that the United States is one of the greatest nations on this planet, I am amazed at the constant flaws of their foreign policy. I also think that government is being manipulated by big businesses, financial institutions and socialist government bureaucrats that promote big government over the individual. I hope this madness stops before it gets out of control. If things spiral out of control those people who hold gold and silver will retain their wealth. Those who hold fiat dollars will be destitute.
Could this mark the beginning of the decline of gold from prior highs? I don’t think the decline will start with force, given Janet’s comments this past Friday. The Fed is planning to maintain its schedule until better conditions prevail-this is fairly unpredictable given so many exogenous factors that could throw the recovery off, like further economic losses in Europe or China. However, once this begins, we might expect to see capital flow to where higher returns can be made. Given a pent-up demand for higher returns-hopefully it will not create an asset bubble.
Although the primary focus of this website is to report on the different aspects of the gold market (gold fundamentals as well as economic or monetary analysis), we also tend to release basic technical analysis in gold and silver. As of this week, we will also summarize the key events at the start of each week that are likely to impact the price of gold and silver price.
Contrary to popular belief, rising rates are no threat to gold. This metal soared in the 1970s during the last secular rising-rate environment as stocks and bonds got hit. Gold powered higher again in the 2000s with both short and long rates far higher than today’s levels. And gold surged during the only major modern rate-hike cycle seen a decade ago, when the Fed more than quintupled short rates.
Earlier in the year, we stated 2014 could be like 2013, price-wise, and that appears to be playing out. However, as the idiom goes: appearances can be deceiving, and it is certainly true of the chart prices for gold and silver. The natural forces of supply and demand would have PM prices much higher, if for no other reason than an inflation adjustment. It is the ongoing exertion of unnatural forces that have been dictating prices for so long.