We have some concern with gold all of a sudden as the dollar has bounced off that 100 mark and moved higher and is likely to test more highs as the stock market keeps hitting higher highs into the Fed meeting next week. Then I imagine it will be “sell the news” and the market will probably first move higher and gold lower immediately and from there some trades long be made in gold and short the overall market.
Remember, we have been here before. Last year the Fed was set to raise rates on bad data and this year though they have better data, but I think their rhetoric to talk about raising rates 3 times in 2017 (they said they would raise rates 3 times in 2016 of which I called their bluff just after they raised last December) and tone it down to language more like “we’ll wait and see if the economy continues to shine” language. This may not be good enough for the market, but if they speak of 2 or 3 rate increases in 2017, then I know they are dumber than dirt. But the market does still believe the Fed which if this kind of rhetoric does occur, then expect a move higher in markets and a potential immediate washout in gold.
Doug Eberhardt is a 28 year financial services veteran and precious metals broker selling gold and silver at 1% over wholesale cost. Doug has written a book to help investors understand how gold and silver fit into a diversified portfolio, how to buy gold and silver, and what metals to buy. The book; “Buy Gold and Silver Safely” is available by clicking here Contact phone number for Buy Gold and Silver Safely is 888-604-6534
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