Tag: gold price

What Will the End of QE Mean for the Precious Metals?

What Will the End of QE Mean for the Precious Metals?

There is a widespread misconception that only rate cuts or more QE would be bullish for gold and silver. To the contrary, if rising inflation pressures force the Fed to raise rates, that would potentially be quite bullish for gold and silver as well. Instead of fearing rate hikes, metals investors should actually look forward to the next rate-raising cycle. That’s when the biggest gains in gold and silver could come. At some point, yes, real interest rates may turn positive and precious metals prices may get overextended to the upside. But neither situation exists under current market conditions.

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Events Impacting The Gold And Silver Price In The Week Of October 27th

| October 26, 2014 | Category: Price
Events Impacting The Gold And Silver Price In The Week Of October 27th

Gold and silver are still moving at a key juncture. Gold bulls should be able not to let prices go lower from here, at least not on a sustained basis, to avoid a break through critical support. One negative for the precious metals complex is that gold stocks have been sold off heavily during the week. On the other hand, gold is increasingly behaving as a safe haven in a world which is becoming more and more uncertain. For the week commencing October 27th, there are some key economic data coming mainly from the U.S. and European Union. There are no formal Central Bank statements expected.

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What Is The Link Between Gold And QE?

What Is The Link Between Gold And QE?

It is clear that “money printing” as such does not correlate in a one-to-one way with precious metals, although it is, so far, higly correlating with stocks. During all the QE phases, stocks have been performing well, while gold has only benefited from QE1 and QE2 as those periods where associated by the market with inflation. On the other hand, QE3 provided THE ultimate “risk on” trade; because the invisible hand of the almighty central bank was there stimulate endless risk. That is when gold was literally ababonded, at least among Western investors. The interesting part is that gold is today behaving as a “risk off” trade, sort of a “safe haven” trade.

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Gold Is Extending Its October Run

Gold Is Extending Its October Run

The correction in the Dollar helped gold as the Gold SPDR GLD advanced over 5% from its early October low. The first chart shows GLD breaking the August trend line and moving back above the support break. In an interesting twist, gold is ignoring weakness in the Euro today and moving higher. While I am not sure if this will last, I would mark first support at 118 and stay positive on gold as long as this level holds. All bets are off if the Dollar breaks out to the upside.

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Gold & Silver Show Mixed Signals While Bitcoin Shows Relative Strength

Gold & Silver Show Mixed Signals While Bitcoin Shows Relative Strength

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.

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What The Strong Dollar Does With The Price Of Gold

| October 20, 2014 | Category: Price
What The Strong Dollar Does With The Price Of Gold

As heretical as it sounds, there’s a downside to America’s success, and that’s a stronger dollar. For the 12-month period, our currency has seen a 1.1-standard deviation move, which has put pressure on two commodities that we consider our lifeblood at U.S. Global Investors: gold and oil.

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What Happens With The Gold Price If Deflation Wins?

What Happens With The Gold Price If Deflation Wins?

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?

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What Has The Gold Price Done Since 9-11

| October 16, 2014 | Category: Price
What Has The Gold Price Done Since 9-11

Note the graph of the ratio of gold to the S&P 500 Index. Both are rising together and gold is now inexpensive (again) compared to the S&P 500 Index, like it was on 9-11. Since 9-11 crude oil prices have gone much higher and crashed lower but on average they have increased with gold prices.

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Gold Prices Rally Strongly amid Falling Equities

| October 14, 2014 | Category: Price
Gold Prices Rally Strongly amid Falling Equities

The gold price suppression has been the result of the activities of the CME Group, together with major banks. By using paper contracts on Comex, these institutions are causing severe dislocations in the real world and the scam can’t continue indefinitely and will cause its own demise by how it distorts the real world of supply and demand. Furthermore, the recent rally in the U.S. dollar is unjustified by the economic fundamentals and will not be sustainable in the long-term. Gold therefore remains a crucial portfolio diversifier for the potential dangers ahead.

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An End Is Still Not In Sight Gold And Silver’s Price Decline

| October 11, 2014 | Category: Price
An End Is Still Not In Sight Gold And Silver’s Price Decline

We prefer to follow developing market activity, and let it determine when a bottom is final. The realization of a bottom can take days, often weeks to confirm. Those who have called bottoms in the past few years never had the patience to wait for confirmation, which never came, obviously. Weekly gold has hit important support for the third time since the 2011 highs. There was an immediate rally following the previous two tests, and it would seem one will follow this one. There is a more positive sign on last week’s retest, for it is the only retest where price opened near the low for the week and closed relatively strongly.

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5 Reasons Why The Gold Price Could Have Bottomed at $1,180

5 Reasons Why The Gold Price Could Have Bottomed at $1,180

The yellow metal has fallen nearly 40% from its 2011 high above 1900 to trade below 1200 at the start of this week, mirroring Columbus’s own fall from grace as more of his transgressions have been brought to light. We wante to highlight five reasons that gold may not be irreparably damaged.

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Gold Price – A Significant Bounce Off Support

| October 9, 2014 | Category: Price
Gold Price – A Significant Bounce Off Support

Thanks to a sharp pullback by the dollar gold has managed to bounce off an important support line, and offers the possibility that another rally is beginning, a rally that could end the long decline from all-time highs. It is a time for increased attention for those who want to catch the next gold rally.

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Gold vs S&P 500: Insights From The 25-Year Chart

| October 7, 2014 | Category: Economy
Gold vs S&P 500: Insights From The 25-Year Chart

The gold vs S&P500 ratio at the gold peak in 1980 was about 8. The ratio was trending downward from 1980 to about 2001. Subsequent to the stock market crash of 2000, 9-11, and the massive increase in spending and debt, the ratio now trends upward.

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Gold Price vs U.S. Debt Ratio In 2014: A Major Disconnect

Gold Price vs U.S. Debt Ratio In 2014: A Major Disconnect

Gold has tracked the expansion in US debt pretty handily. The correlation between the two is +0.86. In 2011, the rise in the gold price became overextended relative to the rise in US debt. Then it decoupled and went in the opposite direction. This is a similar trend to what occurred in the early 1980s. And if one expects that relationship to resume, then gold looks anomalously cheap relative to the rising level of US debt.

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