From the Trading Desk
Greek Prime Minister Alexis Tsipras accepted new proposals from creditors including stipulations for a EUR 50 billion sale of Greek assets and acceptance of a high level of domestic economic supervision by bailout monitors. The euro and gold immediately traded lower upon the release of the news. Gold has now traded lower for the third day in a row. Major support for gold seems to appear any time it dips below $1,150 and this is really the key short term area to watch. Coin and bar demand in the US remains strong but figures out of Asia haven’t been all that impressive. Indian demand has been lackluster but this will likely change if gold has a sustained move below $1,150.
Today’s lousy retail sales news had gold positive early on today and the market down. But the typical pattern of buy the negative news on a quick dip played out once again as the DOW ended up 80 points higher and gold faltered the rest of the day spoiling my plans of a bounce coming. To make matters worse for the DOW bears, retail sales were revised down .02 from last week .02%. Gold was pummeled during the last retail sales report and now that we know that report was not accurate but revised lower, gold is down again. This continues the them of bizarro world I brought up a couple days ago. What’s bad is good and what’s good is bad, but with a twist. In this day and age of investing, whatever data that is bad or good is good for the stock market and bad for gold.
Some Fed members agree with the negative data like Chicago’s Charles Evans. Former Fed member Richard Fisher seems to think a rate hike is coming. He believes that Europe is now settled and off to a recovering economy we go.
The dollar peaked at 97 today, a number that Avi Gilburt at ElliottWaveTrader.net was looking for. This may be the catalyst for a short term bump in gold. I am only calling this because we are NOT breaking down below Nov. 5th lows. We do keep hitting some lower lows heading towards that price level, but we just can’t break below it, hence my leaning long on the metals. I think we’ll find out direction soon, but at least you know where I lean. Americans are seeking more credit which the Fed looks at as a positive. I look at it as a repeat of what led to the 2009 financial crisis; consumers taking on more debt.
Where is the truth? How can Fed members see things so differently?
I will say that after that last rush for about 10 days in the metals on this latest price dip, the orders have died down and my suppliers have lowered their premiums on some products again. This is a negative indicator, but keep in mind I have investors trained to buy on the dip. Also, if the price falls quickly like it just did, buyers don’t usually come in and push the market higher, so this is normal price action. The professionals are in charge at present and will move the markets where they want to.
We will be rolling out our ETF Research Trading Analys this week. We will make an announcement here as well as via those who have signed up for our Newsletter (see right column to sign up for Newsletter). Do not click on the package yet as it will start the 2 free weeks, but bookmark it for future reference.
Related posts
About Doug EberhardtDoug 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
Disclosure:
Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don’t trade with capital you can’t afford to lose. This is neither a solicitation nor an offer to Purchase/Sell futures or options. No representation is being made that any account will or is likely to achieve gains or losses similar to those discussed in this outlook. The past track record of any trading system or methodology is not necessarily indicative of future results.
All trades, patterns, charts, systems, etc. discussed in this outlook and the product materials are for illustrative purposes only and not to be construed as specific advisory recommendations. All ideas and material presented are entirely those of the author.