Gold and silver had a nice pop on Friday and stayed over $1,200 after once again not breaking through the $1,190 level. It has clearly stayed in this range and perhaps this is the time it breaks higher.
I look at many indicators in trying to decipher the short term. The moving averages as the chart above show, can’t be ignored. We may get a push to the 200 day level before another leg down.
There is a lot of economic data coming out this week and 6 Fed members speaking, including 4 on Thursday. Should make for an interesting week. Many I am reading are calling for a dip in stocks. This could be beneficial for gold if we get the dollar to fall a bit. I know that some say the dollar doesn’t matter and I understand this. You can’t ignore the charts since 2011 that I posted in Thursday’s Current Thoughts.
While I talk about the data that is coming through and see that much of it is negative, another indicator I look at is simply what are stocks going? They are back over 18,000 again. While gold may still get a little push higher here, if the stock market continues to record highs in the months ahead, this will put more pressure on gold. If the dollar continues higher, like I think it will, I would use any move higher in gold to hedge any longs you have. Another lower low will come in my opinion. Call it a dead cat bounce or what have you. Let the indicators show you how to invest and remember, allocate into a position for the eventual ride up by dollar cost averaging.
Gold is down 40 cents and silver up 2 cents in Asia, not really telling us anything just yet.
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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