Yesterday I said; ” We still overall see some short term dollar weakness and gold is running up towards its $1,200 resistance. Silver just hit $15 and could go up to the $16 resistance. You’ll recall these resistance levels from last year.” Today we hit $1,200 twice and pulled back to $1,190 by the close. The dollar did fall some more and got a bounce midday with more news out of Europe that the ECB would do more QE in March, then fell some more. We did get our feet wet with the first trades in DUST today but went home flat. Gold is sitting at $1,194.60, just up from the closing mark.
Chinese markets are closed for the week and today we got a taste of what the markets are like in the U.S. without looking over our shoulder at China. It was a pathetic performance with the DOW falling to -400 before rebounding later in the day. Futures are presently down once again.
Dennis Gartman has give gold the kiss of death by going bullish. He has been bullish in Yen and Euro terms because he has two funds that he runs that trade long gold in Euro and Yen. They really haven’t performed that well. If I were to run my own fund I sure wouldn’t restrict myself to only being able to trade one way.
Silver was a big winner today hitting $15.48. It’s at $15.36 presently and I would watch silver for signs of what gold may do next.
But more importantly I would watch the U.S. dollar as it will serve as the main reason gold will do what it does. With Europe doing more QE in March, we will get strength in the dollar and you can bet Japan is thinking of something they can do to weaken their currency. China when they get back from celebrating the New Year will do the same. This is all central bankers know how to do and if you’re the Fed right now your hands are tied because you can’t after just raising rates all of a sudden lower them. They are lucky the dollar is a little weaker but treasuries are not. We are headed to 1% now on the 10 year. Negative rates could be around the corner.
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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.