Gold fell in early trading on some bad China data and spent the rest of the day climbing back up and ended the day positive. Gold is on its last legs before the eventual turn down to the lower lows I have been writing about for so long. Watch the dollar move over 95 for your first clue as to what gold should do next. As you can see from the chart below it is consolidating at 84.80 presently.
I have been telling you recently one reason I have been dollar bullish is because of what’s going on with Germany that can negatively affect the price of the Euro which makes up more than 50% of the Dollar Index.
In news today German investor morale plunged to its lowest level in a year.
The survey gave the first insight into how the biggest business-related scandal in Volkswagen’s 78-year history is hitting sentiment in Europe’s largest economy at a time when a series of data releases have shown German industrial orders, output and exports tumbling.
Mannheim-based ZEW said economic sentiment, as measured by its monthly survey, fell to 1.9 points in October from 12.1 in September. That was the weakest reading since October 2014 and far below a consensus forecast for a reading of 6.0.
Naturally “officials” downplayed this news, but I sure don’t.
In other news, CNBC had an article that came out and said “The US is closer to deflation than you think.”
In fact, if not for a comparatively high inflation rate in the Western quadrant, the U.S. itself actually would have had a negative consumer price index rating in August, driving its economy into the same deflationary malaise found in other slow-growth regions.
With deflationary pressures building, the case has gotten considerably more difficult for the Fed to move in 2015.
Nice to see CNBC aware of the deflation I have been writing about and what should keep the Fed from raising rates anytime soon.
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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