No good news for gold bugs so far this afternoon. Gold and silver opening slightly lower in Asia. After Friday’s non-event where we saw gold and silver scores for the metal and miners move slightly lower, it seems we are still on that same path.
I hate to say this, but I do see at some point gold moving to the under $1,000 level. It is a psychological level that I see market makers wanting to break. It is a level I know the Federal Reserve would love to see broken and it would break the backs of many gold bugs.
But I am a gold bug in the sense of where gold will eventually head. As much as we see deflation in pretty much all commodities like copper, oil, grains and of course gold and silver, we see the national debt move higher and higher. This is of course manageable today with such low interest rates but I can guarantee your kids calculators can’t compute what the interest rate is on $20 trillion. Meaning, at some point interest rates move higher.
But I don’t see them moving higher on the false premise of an economy that is recovering. Far from it. This in my humble opinion is not reality. While we may see automation improve the economic outlook in some areas, it does not create more jobs. College kids today that are graduating are doing so without a job and with heavy student loan debt. This is not your America at this point where we are the leader in anything except the production of war machine related industries and some internet companies. Jobs have simply been outsourced to lower salaried countries as well as the companies themselves relocating overseas. What money our nation has left is being siphoned off into the economies of other nations. Yet we still do have wealth here that is transferred from person to person. But money velocity is indeed at a stand still. This is deflation folks.
In deflation you try to get your piece of the pie that’s left and try and survive. Gold and silver are simply going to survive but will be feeling the effects of deflation for a bit longer. Patience is needed.
Fed meeting coming up this week. More volatility will come with it as usual. Professional traders only please.
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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.
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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.