The dollar moved higher today and gold took it on the chin about $15 most of the day and closed at $1,244. Silver, which I pointed out yesterday showed some strength is now seemed destined for higher prices and this will be confirmed on a down day in the dollar if we get it tomorrow. Gold should be destined for higher prices too, but today’s move was a decent one lower.
I’m not ready to throw in the towel yet on gold and silver and let’s just say we are in the 9th round of a 12 round fight for higher prices but the final decision won’t be in favor of gold as it has one more knockdown to come before it can claim victory (or at least those who own it). The dollar will still be your key to watch.
The overall market does seem to be getting toppy though. The VIX is showing no fear and yes, I do find it rather surprising that gold is up with the VIX falling to these levels. With no real uncertainty the simple fact that the Fed cut back on their interest rate charge is equivalent to the “threat” of QE from the past which actually did move prices higher short term, only to be followed by lower prices and more QE each time. This time is no different and we don’t even have QE on the table. Not yet anyway.
I am ok with the move higher and don’t feel I am out of line with my continued advice of dollar cost averaging into one’s gold and silver allocation. I have warned of lower prices to come and I do expect them still. Buy buying the dips when they come you are not “chasing” metals higher. Dips always come, like today’s $15 dip in gold.
I will repeat that my take on the Euro and Yen is that something will crack up with them in the near future. This will be dollar bullish. For now enjoy the ride with gold and silver and take profits if you are trading.
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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