It looks like gold is heading the same direction as the Chicago Cubs hopes, down and out. Watch for the dollar to potentially climb above 95 on the index if this is indeed the final micro top for gold. $1,200 is acting as good resistance and there is still a chance we can shoot a little above it to trap the last longs before we head south to under $1,000. If my data is correct about the deflationary contraction still in play, and I try and provide most of it to my readers, then those who are bullish gold need to ask why will it go higher if the dollar is not crashing like so many gold bulls have been calling for?
The area to analyze is Europe and also Japan. Last week I gave you my thoughts on Europe with the data coming out of it’s economic powerhouse Germany. Today we’ll take a peak at Japan.
“The government revised down its basic view on the country’s economy for the first time in 12 months in October.”
“Mounting inventories have Japanese manufacturers losing their willingness to spend on new facilities and equipment. And an increasingly uncertain future is only making them more cautious.”
Japan Inc sounds alarm on consumer spending
“Do not believe in official statistics, Japanese retailers seem to be saying, as they cut earnings forecasts and warn of lackluster consumer spending, a key growth engine for Japan at a time when exports and factory output are stalling.”
As you can see, Japan, which has been mired in deflation and alarmingly high government debt, isn’t digging itself out of their mess and the data shows weakness and no Abenomic miracles.
The bottom line as I see it, Europe and Japan are going to get worse and perception will be the dollar will benefit. The stock market here in the U.S. is trying to break higher and we’ll see that if there is a push higher we more than likely will see the dollar get stronger and gold get weaker.
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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