Did someone say volatility this week? Most everyone who trades knows that the week of the Fed announcement we get some good moves in most all markets. When coupled with options expiration coming this Friday, the moves can be even more severe and that is what we have seen this week and especially today in gold and silver.
Even the dollar was volatile today as it moved over 95 then below by the end of the day. Is this what the Fed means by an objective of price stability? Not if you look at these charts.
Gold moved as high as $1,318.85 and as low as $1,280 and is presently at the low end of that spectrum at $1,281. Today was all the makings of a push to higher highs, take out stops, then pull the rug. I had said in yesterday’s blog article they would at some point pull the rug from under the gold bull but didn’t expect it all the next day. In reality, I think this dip is still a buy but I would watch the dollar over 95 as your caution area.
Mining stocks like the leveraged ETF JNUG broke to a new high today and then fell 39 points. That’s a difference of $39,000 from high to low for those who held onto 1000 shares. Yes, that’s pretty volatile. The DOW also had a 250 point range today, finishing the day up 92.93 points.
Buying in precious metals has died down with the quick upturn we have had in metals. There is more uncertainty and seems to be more sellers than buyers at present at the mints. Most traders are going flat into next week as we await the results of Brexit. I wouldn’t expect much movement until that time in price next week but tomorrow with options expiration we may get a little more up and down price action. I would at present be buying the dip from a micro perspective if trading, and of course with stops as noted on the dollar above.
Below is a reply to a post from someone on a different website who was bashing gold with the usual barbs like, they would rather have food than gold if the world were to be coming to an end. I thought I would step in and offer my opinion:
2. Interest on the debt manageable today but the government will have to cut current programs or print more money to pay the higher debt cost in the future once interest rates rise.
3. We have a Congress that calls a “balanced budget,” 9 years of adding to the debt and the 10th year coming in under budget. This is pure lunacy. Congress job is to pass spending bills. They never control their expenses. Best explanation of this is here (wish they updated this every year): http://bit.ly/1tgXtUM
4. We have the GAO predicting no inflation in the future. This has never happened yet their long term outlook on the charts show this. What are the odds of no inflation?
5. Many more issues I could list.
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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