Today was a day where the Fed backtracked on their raising rates 3 to 4 times this year because of lingering risks to the economic outlook. On this news gold shot up as the dollar sank.
I have been pointing out how the Fed cannot raise rates based on the data I see. I have gone so far to say they will not raise rates at all this year. What you the potential buyer or current holder of gold want to know is, how can you be negative on gold when all signs are pointing for gold to move higher? For me, why are you doubting me when I have been right on most data that I read, as well as what the Fed is doing? In fact, I am writing an entire book I have spent the last 2.5 years finishing that I foreshadowed with Chapter 4 of my first book.
Personally, wouldn’t I be better off just telling everyone to buy gold right now? Wouldn’t I make a lot of money doing so? Of course I would. But I don’t feel I am providing you with the insight that my research tells me is going to occur in the near future. The Fed sees this now and is scaling back their rate hikes. Why can’t you scale back your bullishness too? In the words of Bachman Turner Overdrive (circa 1974), you ain’t seen nothing yet.
As I have pointed out in my last blog article and here on Current Thoughts the last few weeks, as well as articles I have written for Seeking Alpha, the data is being ignored and commodities are simply in a micro bull cycle while the dollar takes a breather. I have said this can continue for a bit and the dollar could see some resistance at $1,300 and possibly move higher. Can gold go to $1,400 before it falls hard? Sure it can. Am I worried about my reputation if it does? Not one bit.
My advice for physical metal purchases has always been the same; dollar cost average into your allocation for gold. I’m not shying away from my predictions because my analysis has helped me call the markets better than most. I’m not a one trick pony who is screaming “dollar crash” like most others that sell gold. This is a joke to me anyone who thinks this way. I am bullish the dollar but do think we can fall a bit more. I’ve explained why many times but the main reason is because the Euro is toast and the Yen is close to toast. How can anyone be bullish the Euro or Yen?
I ask for a little more patience and trust in you believing what I see. If you don’t, that’s ok. But I haven’t let anyone down so far and I don’t plan to in the future with my analysis. Those bought gold the last few years when I was saying to be cautious did so because they listened to the false narrative of a dollar crash, inflation or hyperinflation. They don’t even understand what a deflationary credit contraction is. For that matter, neither does the Fed. But the Fed is waking up to it, aren’t they? The Fed is the last to do anything to help the economy. They are a lapdog for CNBC more than anything else. They can’t think for themselves.
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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