Gold had another good move earlier in the day and then gave it all back. The dollar did however break down below it’s 5 day trend but still needs to get below 93.13 for us to jump fully on a gold bull for a ride. The Greece kicking the can down the road has buoyed the Euro for now, but eventually Greece will be sent packing and this would be viewed as dollar bullish at first while Europe figures out things.
Perhaps the IMF recently came out and said to the Fed not to raise rates because they need a stronger Euro. That’s my take on it since they are heavily invested in Greece’s outcome. But Germany’s Merkel seems to think Greece will default. They have till the end of June to get 1.6 billion together to pay off the IMF. I won’t hold my breath and I don’t think Merkel will either. If Greece doesn’t give into concessions on the pension and labor market reforms, they can’t do anything but seal their fate.
The overall stock market is being wishy washy just like gold of late. It is better to sit these kinds of volatile markets out and wait for a trend to develop and jump on it rather than play the guessing game. The guessing game will just make market makers rich. They love when you play with them. Investors actually think they can beat a professional at this game of churn. A wise investor just waits for the dust to settle and makes money.
I’m working on the consumer behavior section of my next book right now and will share with you a couple things. The first is a quote;
George Santayana; “Those who do not remember the past are doomed to repeat it.”
This quote fits in to where we are in the current cycle per the chart below. It’s easy to see what’s next. The only question; to what extent will this current cycle keep moving higher? I personally think we get a pullback and then a higher high in the stock market and a lower low in gold, below the November 5th lows in the $1,130 range.
If you substitute the word “gold” for markets in the pink box above, it is “representing the point of maximum financial opportunity and fits in with all asset allocation plans which I will be explaining more in my next book.
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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