Had a little bit of an upswing in gold and silver as they just can’t get to the lower lows I am expecting. This range bound activity may be boring for most, and I will say it is difficult to write about as I would prefer to write a million bullish articles on gold, but this week is Fed week and we are getting closer and closer to see how the Fed reads the same data you and I read.
Are they wearing rose colored glasses or do they see the depth of the problems that we are indeed heading into a recession? Can they possibly raise interest rates if that’s the case? No. I think they need just enough good news to squeak in a September raise of rates of 1/4 and this week will point to good signs, strong overall dollar and the possibility of raising rates in September. I don’t see them being all negative and talking down any recovery momentum. Let the IMF do that! haha
But will the Fed address things like today’s lousy industrial production report? What about all the other lousy data outside of retail sales and the employment numbers? Are those latter two enough to give the Fed hope? Not this time around. They need more.
Things are not good in Europe (Greece) or Japan (Debt to GDP) overall and I still view this to be dollar positive and having a further affect on the price of gold and silver. The U.S. and the dollar are in a way holding the world on it’s shoulders, but it can’t do this for an extended length of time. The U.S. has their own issues and even the IMF said “don’t raise rates.”
Should still be a volatile week for everything and if Monday is any indication, maybe a terrible week for stocks which are negative for the year. This can take mining stocks down too a bit, even if we get a little spike in gold.
No reason in my opinion to do anything but dollar cost average into your gold position on dips. Not a time to go all in just yet. Patience is needed please.
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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