The dollar above 94 on the index is giving gold a little pause today. This coupled with a record breaking stock market is currently causing gold to decide if it wants to break out higher or now.
The big news this week will be Wednesday with the release of the Fed minutes. This typically brings volatility to the markets and should with gold and silver as well. There’s a lot of data coming out this week and since we see market trading on data day to day, expect the same this week. It is difficult to call immediate direction on a week like this, but you can bet we will get some good moves either way.
If I were to look for data that helps me guess direction I would keep an eye on the dollar more than anything else. As a general rule gold will move opposite the dollar. If the data comes in good, gold should go down as the dollar goes higher. If the data comes in bad, gold should move higher.
There is really not much more that one can say about today’s gold and silver market other than silver seems to be a little stronger than gold at present. If you are a short term trader, trade the data in the direction of the metal. If you are a long term investor, wait for dips to dollar cost average into your allocation. Dips will always come. And as many of you know I expect a big dip at some point this year, under $1,000 an ounce. All it takes is some good data, a stronger stock market and a complicit Fed. But all of that is just an illusion as the data isn’t good, the stock market moves higher but based on nothing but hope and the Fed is always reactive.
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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