From the Trading Desk:
Global equities tumbled today but the risk off sentiment didn’t carry over to gold. The yellow metal bucked the trend and instead made modest gains on the day. Volume on the Comex electronic exchange for the active December contract was light at 90,000 lots traded and reflected summer trading conditions. After a big drop in mid-July, gold has spent the last three weeks consolidating in a new trading range. Bids have lifted the market as it approaches $1,080 on the downside while sellers have firmly entrenched $1,100 as resistance. Physical coin and bar demand in the US remains strong but Asian demand for kilos isn’t noteworthy. Silver has fallen into the same pattern as gold and has spent the last few weeks consolidating between $14.40 – $15.00. US Non-Farm Employment figures have the potential to rattle the markets tomorrow but it feels like it’s going to be a quiet end to the week.
Yesterday I said; “let’s get that dollar under 97 and get gold going over the $1,100 mark before we get the door slammed on it once more to under $1,000.”
Gold tried to push up higher today and ended higher along with the mining ETFs, but not over $1,100 yet. The dollar was resilient today not giving back much and is still hovering around the 98 mark. It needs to fall if gold is going to get any type of rally.
All eyes will be on the jobs report tomorrow. The ADP report didn’t come in as good as expected and the stock market needs a spark, so lets see what they give us. If the report is good, then you know what that will do for gold. If it is not good, then gold should move past $1,100.
Guess what interest rates did again? They fell. I have been calling for lower and lower rates which fits my economic analysis. The rate on the 10 year fell 2.14% to 2.22 today.
DEFLATION
Even though we may get a bounce in commodities at present (depending on jobs report tomorrow), prices in commodities have been crashing. Food prices are at a 6 year low.
While all this has been going on we have seen the stock market break to new highs, real estate enter a boom phase again in some areas like Miami housing and of course most of California and NY/NJ.
Does anyone know how a deflationary credit contraction ends? If not, I explained it in detail in my first book Chapter 4; Buy Gold and Silver Safely. The problem is, most people who buy that book did a search on Amazon.com for a gold book to buy because they wanted to learn more about buying gold. The main reason I am writing my next book “Illusions of Wealth,” is because it will hit the 99% of investors who know nothing about gold but also really have no clue about what’s to come.
Most of these investors live in a fantasy world where stocks will always go up. They had no idea what hit them during the last financial crisis and are sitting in la la land as we speak not realizing that the Fed has caused the same bubble to occur.
If you have not yet signed up to be one of the first to know when the Illusions of Wealth book will be released, please go to IllusionsofWealth.com and sign up to be notified. Thank you.
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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.