Current Thoughts for 6/19/2016

Gold and silver are gapping down in Asian trading with silver in the 17.30’s and gold in the mid $1,280’s. The news of the week will come in 4 days, June 23rd with the Brexit vote and whether or not voters will want Great Britain to leave the European Union. It seems that the consensus is they will. This is being viewed as Euro negative and dollar bullish and that’s the way we’re trading. Come the actual vote however, we could see a reversal in both (sell the news).
I had a discussion recently with a client who follows a fellow writer on gold Gary Savage who called a dollar top after it hit the 100 level twice.
Double Top
Part of my reasoning for an eventual stronger dollar is my negative view on the Euro and Yen. I’ve been calling for a lower Euro since 2011 when it was in the 130’s. http://buygoldandsilversafely.com/gold/confused-about-falling-prices-of-gold-and-silver-part-1/
It is my analysis of the countries that make up the Euro, most of which have a Debt to GDP ratio worse off than the U.S. that leads me to be negative on the Euro which makes up 54% of the dollar. When you throw in my banking analysis of these countries, it adds more issues they have to deal with that the U.S. has already done so.
The Yen is strong but I don’t believe Shinzo Abe will allow it to continue this way.
China still has to go through their contraction which can bring all Asian currencies lower.
These are the points I bring up in my next book with of course my substantiating evidence.
If I looked a a chart only, I might come to some of the same conclusions as Gary. But I do look at more than that and it hasn’t hurt my analysis since I first started being public about what I see, but I also use over 30 years worth of deciphering this stuff since I got in the business and even more since my father introduced me to it in high school in the 70’s.
For holders of physical metal, it’s a rather moot point if they think, like I do, and like Gary does I believe, that gold and silver are going much higher in price in the future. My book gives more reasons than any other book I have read that this is the case.
That said, I have analyzed the chart of the dollar and if we did break below that 92 range as shown on the chart below, there is not much stopping it till 88. 88-90 would be my line in the sand for a bottom though. The price of gold in 2010 was at it’s present price when the dollar was in the 88 range. While it is not black and white,  I do think whether we reach these levels or not that we break 100 again and push towards 120 which would also be a double top as seen in the second chart.
Dollar Top 1998
Lastly, what Wall Street prognosticators say I don’t listen to at all. I have critiqued both the always bullish CNBC and always negative Zerohedge crowd equally. I do so in my book as well. I state in my book where I think the market is headed based on certain types of analysis that is pretty accurate and then teach investors how to decipher value for themselves. More importantly I talk about how to take profit which is much different than your typical “buy and hold” advisor..
Investing doesn’t have to be difficult for people. It incorporates many variables that one can analyze to help decipher the waters. If the majority of mutual fund and hedge fund managers can’t beat the index, most others can’t either and should just invest in the index. But they can still do some charting through people like Gary or take into account what I say and keep stops or take profit. That’s where we who write what we write can help.
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About Doug Eberhardt

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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