With the Fed continuing to ramp down its QE programme, a bearish technical set up, and a lack of CPI inflation, the outlook for gold is bearish, and therefore gold is still likely to go to $1,000 before it goes to $2,000.
Wholesale gold edged back from last week’s two-month closing high on Monday morning, recording its best London Gold Fix since 18th June above $1375 per ounce. World stock markets slipped, with Indonesia dropping 5.5%, as major government bond prices also fell, driving interest rates higher.
The price of wholesale gold fell back to $1320 per ounce Wednesday lunchtime in London as new data showed the US economy expanding faster-than-expected. Second quarter GDP rose 1.7% in real terms from a year earlier, the Bureau of Economic Analysis said.
Gold has made some good progress in the last three weeks, and not surprisingly, so has the Gold & Silver Mining Index (XAU). When we looked at the chart recently, we saw a number of features worth talking about.
Wholesale gold rallied from a drop to $1310 per ounce Thursday lunchtime in London, gaining as world stock markets also cut earlier losses. Trading back above $1322 – a two-year low when hit by April’s gold crash – spot bullion also rallied 1.0% for Euro and Sterling investors.
Last week’s article ‘The Big Picture: From banking crisis to sovereign debt crisis to currency crisis’, provides a brief outline of each of the macro forces and trends that are currently impacting the global economy and financial markets. Today’s article attempts to show these forces in visual form so that investors can begin to understand the interplay between them.
Regular readers will know I am in the inflation, possibly hyperinflation camp; but there are those that think the future is more likely to be deflationary. In the main this is the view of neoclassical economists, Keynesians and monetarists, who generally foresee a 1930s-style slump unless the economy is stimulated out of it.
This regular column reviews the condition of several different markets. This week’s column examines the chart pattern that has formed in crude oil, the best performing sector in the S&P 500 (the financials), and the powerful uptrends that exist within the Wilshire 5000 and the Nikkei.
For the past few years the production of gold has been flat, while the demand from investors and central banks has been trending upwards. This article looks at the fundamentals of the gold market, and how they have been impacted by the recent drop in price.
In this article I will argue that the recent fall in the gold price has generated substantial demand for bullion that will likely bring forward a financial and systemic disaster for both central and bullion banks. To understand why, we must examine their role and motivations in precious metals markets and assess current ownership of physical gold.
IAMGOLD and New Gold are both mid-tier gold producers with a portfolio of operating mines that generate strong cash flow. However, while New Gold sells for a P/E of 18.7, IAMGOLD sells for a P/E of just 6. The question is, is IAMGOLD undervalued or is it cheap for a reason?