Now that gold has rebounded some, is it ready to move higher? It’s up 3.50 to 1291.40 as I type and I think the propensity is for it to top off right around here and now begin to fall and possibly fall hard. $1,200 is the floor here. We’ll see if it makes it there, but around $1,220 I would begin to consider going long. I wouldn’t be holding if a short term trader long right now.
USD/JPY broke below 113 today and if you see it climb back over 113, then that would be your sign that gold has topped on this what I’ll call a dead cat bounce. Silver at 16.78 would also fall. Of course gold miners too.
Jobs data was bad today and it is buoying gold somewhat, but futures are higher today too and ignoring the negative data. Things don’t make sense at times, but that’s today’s stock market. Everyone thinks the Fed is making the right moves, but the reality is, they aren’t even close to making the right moves. Next year they will be scrambling to manage and out of control market and the real potential of a deflationary credit contraction that no one is expecting.
The Trump effect has delayed this contraction and of course the belief in the Fed, raising rates and pretending everything is just fine. Is raising rates good for housing? Is the new limit via the tax plan good for those wealthy enough to not be able to deduct mortgage? Is that an incentive to buy big houses? All the signs are there for a repeat of 2009. It’s going to be ugly.
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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