The Greece news came in with the “NO” vote meaning they wouldn’t succumb to IMF pressure to take cuts on various programs the Greece have enjoyed through the labor of others. The markets took it hard and opened down everywhere including the U.S., but lo and behold, what did gold do? Gold simply didn’t want to join the party. Mining stocks however did rebound a hair.
Part of the reason gold has struggled is of course the stronger dollar which is sitting around 96.40. For gold to take off I would suspect that gold has to break below 94.80 on the chart below. I would take a stab at gold if it broke 95.
Even though we may get a temporary bounce in gold (we are overdue), I still at some point see things imploding more and more. Keep an eye on the 10 year treasury and see if it doesn’t just march straight down to under 2.00 if that’s the case (this is good for bonds).
With my ETF Research Trading Analysis I have been calling for oil to fall via my deflationary scenario and a play we have made 40% or so on so far is DWTI. I have been recommending buying the dips since the 60 range, calling it to 100 since then. Today it got within 9 points of 100. Perhaps 160 is in it’s future again? In time.
When I attend the Freedom Fest this week as an exhibitor, I hope to run into Nobel Prize winning economist Paul Krugman. My only question to him would be; why is deflation such a bad thing? The problem is, the Fed and other Central Banks intervene and “kick the can down the road” expecting the economy to pick up steam and the glory years to continue. On paper, that looks great. In reality, it only works so long. See; Greece, Japan, Italy, Spain, etc. Pain will come for all and gold will fly. Just be patient for it.
Related posts
About Doug EberhardtDoug 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
Disclosure:
Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don’t trade with capital you can’t afford to lose. This is neither a solicitation nor an offer to Purchase/Sell futures or options. No representation is being made that any account will or is likely to achieve gains or losses similar to those discussed in this outlook. The past track record of any trading system or methodology is not necessarily indicative of future results.
All trades, patterns, charts, systems, etc. discussed in this outlook and the product materials are for illustrative purposes only and not to be construed as specific advisory recommendations. All ideas and material presented are entirely those of the author.