Gold reacted hand in hand with the dollar today. Not much more to say beyond that. For micro traders, this is what needs to be watched. For buyers of physical metals, I do believe that whatever happens in the short term with metals, the dollar will keep moving higher again, even breaking 100 on the Index again, and will naturally put pressure on gold and silver. I don’t like being the bearer of this bad news for holders of physical metals but this will be a good opportunity to eventually purchase your final allocation to the metals once we dip below $1,000 in gold and $12 in silver.
I will say that silver is holding it’s own of late. Let silver be your guide to what gold will do in the short term as well. If we are to continue the deflationary trend of lower lows, silver will lead gold lower. Same holds true with oil, natural gas and copper.
From a business point of view, the phone calls have died down of late. I see this as a sign that prices could continue the trend lower. Investors tend to buy metals with one of two scenarios; the first is if we fall in price to new lows, it brings out the buyers. The second is if we take off to 52 week highs. There is actually a third batch too, and that would be the Johnny come latelys who will buy after the price has shot up big time, only to have it fall.
We haven’t had a 52 week high for awhile and we are nowhere near a breakout, so for the most part buyers are coming in on dips only. I’m ok with that. Wait for the dips to buy and guess what? You will have bought at a lower price than today. There is no need to chase higher prices at present.
That’s all for today.
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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.