Gold Market Wire
News, analysis and commentary for gold traders and investors
Gold Market Update
Gold Simmers in New Environment
Sometimes its just best to sit things out. We expected the sell-off. It started to work then suddenly it didn't. That's the sign of a market you could easily get chewed up in, so we stayed hugging the sidelines - which is where we are now. Those sidelines are starting to develop lines that see prices above $2,000 becoming the norm. Our last "trip below" that level didn't last very long, which is noted. Of course, $2050 is the line when settled above on a weekly or monthly, has the potential to cause a significant move higher. Nonetheless, anticipating the market is almost always a fool's errand.
In a nod to the discipline, we are going to wait and see how $2050 is surmounted, but as it stands right now, things certainly look bullish.
The first order of business will be seeing if the power uptrend will hold.
Overall, it's worth zooming out on the situation see how the whole "higher interest rates act like Kryptonite on Gold" theory has been been properly parried. And remember, the trip up here in Gold has been accompanied by a (supposedly dead) US Dollar which hasn't even approached the old level of 1.225, which was a break-down point. We've retraced only about half of that down move. The Euros close of the month wasn't impressive. And yet, Gold still rises. Remember our basic thesis - "long US Dollar and long Gold." The fact that everyone says 'impossible' to that thesis is, perhaps a good reason to entertain it. Fifteen years ago they said Treasuries and Gold couldn't rise together, and they did.
Amidst all these ruminations we are once again we are left with the question: 'Exactly how does Gold sell-off here'? That is a very tough thought, with, perhaps an easy answer. Gold sells-off when there is a successful resolution to the banking crisis solvency issue. How you view that will determine a lot of how you forecast the Gold price.
Yes, Virginia, its true, there really are market fundamentals.