From the Trading Desk
Yesterday, a global equity rally and a stronger USD caused gold to trade lower for the fifth day in a row. Asian equities, led by Japan, started the session off in a positive direction. By the time the US time zone was reached, US bourses trended lower but bond yields rose which weighed on the yellow metal though. Stops in gold were triggered around $1,115 which encouraged further selling pressure. Gold lost 1.75% on the day before ultimately finding bids ahead of psychological support at $1,100. On the physical front, coin and bar demand in the US remains strong but is waning in India, a much bigger market than that of the US. Gold prices in India are at a discount to the spot price after big August imports and a disappointing monsoon season.
Yesterday I said that if the dollar fell below 96 we should get a move up in gold and today we got both. The dollar fell sharply as you can see from the chart below.
It’s interesting to also note that gold is moving up despite the fact interest rates have been creeping up of late with the 10 year hitting 2.22% today. .
All in all it has been a volatile week in the markets, moving lower, then higher, then lower, then higher. Every other day we have had a new direction but usually volatility comes the week of the Fed. Expect the real fireworks to come a week from today on the 17th when the Fed interest rate decision comes and Yellen speaks just after. It’s time for the Fed to raise rates to save their credibility is my call.
Lots of calls today. I feel something’s up with gold and we may get a little run. I was a little early in that feeling yesterday but I was telling Avi Gilburt from ElliottWaveTrader.net that I can’t give a technical reason why I feel gold is going to go up (except for the dollar at times), but that I “feel” it will or it’s just intuition. Don’t know. We’ll see if we get a little run.
Remember it was just yesterday that I posted a tweet by Dennis Gartman saying “After further analysis, it appears we’re back in bear market territory.” Today we went higher naturally. Keep up that 80% being wrong average Dennis!
Next report is Sunday and enjoy your football opening week.
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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