Gold fell today after an early session higher but has not fallen below the closing low of $1,213.50 set a week ago. It still seems to me that it wants to break that 2013 low in the $1,190’s. We simply aren’t that far away from it and if we do break it, it could set up for a further decline in both gold and silver.
The precious metals and mining stocks are all sitting now with a score of -100. This is as bearish as it can get and the falling knife is still sharp.
Dennis Gartman has made some good points in his most recent newsletter about the most recent Central Bank Agreement passing. The Central Bank Agreements have been on going for the last 15 years and was up for renewal. Even though the Central Banks haven’t sold any gold since 2011, in hind sight they probably should have. But Central Banks were selling the entire rise higher in the price of gold, so what do they know? Here is what Gartman had to say;
Concerning gold, it was passed rather quietly late last week but once again the Central Bank Gold Agreement was extended for another five years, but this time it was put forth without any limits on the sums of gold that can or will be sold. Much is being made of this by the Gold bug/Conspiracy groups who are fearful that there shall be a tsunami of gold for sale by the banks that have signed on to the agreement.
The fact there is no limit once again raises that concern and we acknowledge that fact, but the other fact of the matter is that there has been almost no gold sales by any of the Banks involved in this agreement for many years and there is not likely to be any material gold sales for years into the future. Indeed, if the central banks have been doing anything of late it is to purchase gold in the US dollar terms and losses they have suffered are large and growing.
To be precise, less then 18 tonnes of gold have been sold by the central banks over the course of the last three years and all of that gold sold was from the German Bundesbank for commemorative coins produced. Had it not been for that program there would have been zero central bank gold sales since 2011.
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
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.