Best of the Week
Most Popular
1. Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - P_Radomski_CFA
2.Fed Balance Sheet QE4EVER - Stock Market Trend Forecast Analysis - Nadeem_Walayat
3.UK House Prices, Immigration, and Population Growth Mega Trend Forecast - Part1 - Nadeem_Walayat
4.Gold and Silver Precious Metals Pot Pourri - Rambus_Chartology
5.The Exponential Stocks Bull Market - Nadeem_Walayat
6.Yield Curve Inversion and the Stock Market 2019 - Nadeem_Walayat
7.America's 30 Blocks of Holes - James_Quinn
8.US Presidential Cycle and Stock Market Trend 2019 - Nadeem_Walayat
9.Dear Stocks Bull Market: Happy 10 Year Anniversary! - Troy_Bombardia
10.Britain's Demographic Time Bomb Has Gone Off! - Nadeem_Walayat
Last 7 days
BrExit Party EarthQuake Could Win it 150 MP's at Next UK General Election! - 18th May 19
Dow Stock Market Trend Forecast 2019 May Update - 18th May 19
US Economy to Die a Traditional Death… Inflation Is Going to Move Higher - 18th May 19
Trump’s Trade War Is Good for These 3 Dividend Stocks - 18th May 19
GDX Gold Mining Stocks Fundamentals Update - 17th May 19
Stock Markets Rally Hard – Is The Volatility Move Over? - 17th May 19
The Use of Technical Analysis for Forex Traders - 17th May 19
Brexit Party Set to Storm EU Parliament Elections - Seats Forecast - 17th May 19
Is the Trade War a Catalyst for Gold? - 17th May 19
This Is a Recession Indicator No One Is Talking About—and It’s Flashing Red - 17th May 19
War! Good or Bad for Stocks? - 17th May 19
How Many Seats Will Brexit Party Win - EU Parliament Elections Forecast 2019 - 16th May 19
It’s Not Technology but the Fed That Is Taking Away Jobs - 16th May 19
Learn to Protect your Forex Trading Capital - 16th May 19
Gold Ratio Charts Offer The Keys to the Bull Market - 16th May 19
Is Someone Secretly Smashing the Stock Market at Night? - 16th May 19
Crude Oil Price Fails At Critical Fibonacci Level - 15th May 19
Strong Stock Market Rally Expected - 15th May 19
US China Trade Impasse Threatens US Lithium, Rare Earth Imports - 15th May 19
Gold Mind Reader's Guide to the Global Markets Galaxy: 'Surreal' - 15th May 19
Trade Wars and Other Black Swan Threats to Your Investments - 15th May 19
Our Long-Anticipated Gold Momentum Rally Begins - 15th May 19
Defense Spending Is Recession Proof - Defense Dividend Stocks - 15th May 19
US China Trade Issues Will Drive Market Trends – PART II - 14th May 19
The Exter Inverted Pyramid of Global Liquidity Credit risk, Liquidity and Gold - 14th May 19
Can You Afford To Ignore These Two Flawless Gold Slide Indicators? - 14th May 19
As cryptocurrency wallets become more popular, will cryptocurrencies replace traditional payments? - 14th May 19
How US Debt Will Reach $40 Trillion by 2025 - 14th May 19
Dangers Beyond a Trade War with China - 14th May 19
eBook - Greatest Tool for Trading? - 14th May 19
Classic Pitfalls for Inexperienced Traders - 14th May 19
Stock Market S&P 500 Negative Expectations Again - 13th May 19
Why Rising Living Standard in China Offers Global Hope - 13th May 19
Stock Market Anticipated Correction Starts On Cue! - 13th May 19
How Chinese Trade Issues Will Drive Stock Market Trends - 13th May 19
Amazon SCAM Deliveries for Fake Verified Purchaser Reviews "Brushing" - 13th May 19
Stock Market US China Trade War Panic - Video - 13th May 19
US Stock Market Leading Macro Economic Indicators Update - 12th May 19
SAMSUNG - BC94.L - Investing in AI Machine Intelligence Stocks - 11th May 19
US Increases Trade Tariffs Against China – Stock Markets, Gold, and Silver - 11th May 19
Who Has More To Lose In A No Deal Brexit? - 11th May 19
Gold at $1,344 Will Start Real Fireworks on the Upside - 11th May 19
Make America’s Economy Great Again - 10th May 19
Big US Stocks’ 2019 Fundamentals - 10th May 19
Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - 10th May 19
Stock Market Shake-Out Continues – Where Is The Bottom? - 10th May 19

Market Oracle FREE Newsletter

U.S. House Prices Analysis and Trend Forecast 2019 to 2021

Stock Markets Crashing, Gold Rising

Stock-Markets / Stock Markets 2015 Aug 25, 2015 - 11:43 AM GMT

By: MoneyMetals

Stock-Markets

Clint Siegner: U.S. Investors are on edge following last week’s and today’s sell-off in stocks around the globe. The carnage impacted equity markets in Asia, Europe, and the U.S.

Interestingly, the U.S. dollar also weakened. And bonds and gold are getting most of the safe-haven buying.


People are starting to wonder what the central planners might do in response, or if they may be losing control altogether. It must be discouraging for Chinese officials to see selling continue in stocks despite threats to throw people in jail for dumping shares.

Central planners in Washington and New York are likely share the frustration of their Chinese counterparts. They have long been promising an end to the ultra-loose monetary policy that is now nearly a decade old.  But these stimulus-addicted markets aren’t cooperating!

The probability of U.S. interest rate hikes this fall is now falling a rock. We are once again hearing the familiar call from Keynesian economists, including Paul Krugman, for more stimulus and debt.

They acknowledge the trillions already printed and borrowed haven’t worked – but say it is only because it wasn’t nearly enough.

The Dow Jones index has fallen over 1,000 points in the last few days. At the same time, gold has risen about 4%.

Gold futures had not been benefitting from safe-haven buying in recent months.  But that’s changed in recent days as confidence in worldwide equity markets and the dollar has waned.

Should Investors Wait for Even Lower Gold Prices… or Jump In Now?

Looking at 2015 overall, precious metals have not fared well.  Many people are hesitate to make their first precious metals purchase with the fear prices will fall further. 

It’s certainly true that metals recently have not, for the most part, functioned as an attractive alternative to these conventional assets.

That’s largely because gold and silver prices are set in paper futures markets. And these markets are prone to all the same weaknesses: high-frequency trading, bankers manipulating markets in order to cheat their brokerage clients, central bank interventions, and extraordinary leverage.

In other words, prices set there do not fully reflect supply and demand in the real world.

It is understandably tempting to wait for even lower prices before buying.  But with price discovery as broken as it is, relying on price charts alone to make investment decisions is unwise.  The shakier financial markets get, the wiser it looks to diversify out of paper assets including dollars, stocks, and bonds. 

Investors should consider what’s going on in the physical market for gold and silver coins, rounds, and bars. The fundamentals in the physical market paint a radically different picture than the paper and electronic markets do.

While a handful of traders may be selling half the annual world production of silver short on the COMEX and other futures exchanges, there is record buying in the physical market.

Mints and refiners are already unable to keep up with demand. This at a time when, according to CNBC and some of the financial press, gold is no more useful than a stupid “pet rock.”  What will happen when mainstream sentiment starts to shift, and some of those “paper bugs” become “gold bugs”?

Investors shouldn’t let a fixation on trying to pick the bottom in prices distract them from the more important mission – diversifying out of paper assets.

We believe those that currently own little or no gold or silver are taking a huge risk by not fixing that problem immediately. Such folks don’t have the luxury of timing the market.

We agree with this insightful analysis at the SRSRocco Report. Investors aren’t going to get advance warning of the next crisis in financial markets. When it happens, most will be caught short.

And by the time it is clear metal prices have bottomed in the paper futures markets, it may be hard, if not impossible, to get actual physical metal.

By Clint Siegner

MoneyMetals.com

Clint Siegner is a Director at Money Metals Exchange, perhaps the nation's fastest-growing dealer of low-premium precious metals coins, rounds, and bars. Siegner, a graduate of Linfield College in Oregon, puts his experience in business management along with his passion for personal liberty, limited government, and honest money into the development of Money Metals' brand and reach. This includes writing extensively on the bullion markets and their intersection with policy and world affairs.

© 2015 Clint Siegner - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules