Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

A Black Friday for Gold Prices

Commodities / Gold and Silver 2015 Nov 29, 2015 - 03:42 PM GMT

By: Bob_Kirtley

Commodities Black Friday is a big and usually good trading day for the retail sector; however, for gold prices it was a punch on the nose. Gold suffered a loss of $14.30 to close at $1056.10/oz, its lowest level since early 2010.

Background

It’s been almost 50 months since the gold traded at the dizzy heights of $1900/oz back in August 2011, to the delight of every gold bug on the planet. However, since then it has been a slow grind south with rally after rally proving to be just another head fake. Gold has now lost $845.00 or 44.47% of its value in dollar terms, since peaking back then.


Many have called the bottom for this tiny sector of the market only to discover that the bears are still in charge. The reasons for this demise in precious metals are many and varied, however, in our humble opinion; the demise can be explained in two easy to read pictures.

The US Dollar and Gold Prices

First up we have the US Dollar where we can clearly see that since gold’s peak in August 2011, when the dollar was trading at ‘75’ on The US Dollar Index, it has progressed since then to close above the ‘100’ level registering a gain of 33%.

At the same time we have gold which peaked at the dollars low point and has now fallen dramatically since then close 44% lower.

We have posted many articles on the importance of US monetary policy and its effect on the precious metals sector which is in our opinion the single most influencing factor. Physical demand, supply shortages, backwardation, the paper gold market, geo-political difficulties all play their part, but none have the weight of the words and actions of The Federal Reserve.

Conclusion

The next few weeks are crucial for gold and silver prices. Firstly we have “Super Mario” Draghi performing on Thursday 3rd December who might well announce more QE from ECB. Secondly we have the US jobs print on Friday 4th December, which if reasonable would increase the certainty of a rate hike in the minds of most analysts. Finally we the meeting of the FOMC on Wednesday 15/16th December, with a better then evens chance, that a rate hike will be announced.

These three events have the power to boost the value of the US Dollar in dramatic fashion. Assuming that there is a rate hike then soon afterwards the dollar will head north and gold will plummet in dollar terms. The January jobs print will be released on the 5th February 2016 and factoring in winter conditions it may be fairly weak which in turn could hamper the dollars progress. However, if it is a reasonable figure then the dollar will continue to climb. At this point gold will be down to triple digits and may just establish a final bottom.

We are still of the opinion that this bear phase in gold is not over.

Our strategy is to keep our gun powder dry as in US Dollars until we get either a serious spike down or signs that this bear phase has run its course and is now exhausted. We are eagerly awaiting with great anticipation the return of this bull. We have also short listed a number of stocks which we expect to rise in multiples of the gold and silver price rise. This list is constantly being honed in an attempt to select only those stocks with the greatest likelihood of success. As we all know a week can be a long time in the life of a gold or silver producer so staying on top of each unique development is imperative.

If you are new to this sector of the market may we suggest that you start your work right now as the next month or so could herald changes of such magnitude that you will be caught unprepared and possibly panicked into decisions that you may later regret.  

Disagree? Then please fire in your comments.

Go gently.

Bob Kirtley

Email:bob@gold-prices.biz

URL: www.silver-prices.net
URL: www.skoptionstrading.com

To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address. Winners of the GoldDrivers Stock Picking Competition 200

Disclaimer:  www.gold-prices.biz   makes no guarantee or warranty on the accuracy or completeness of the data provided. Nothing contained herein is intended or shall be deemed to be investment advice, implied or otherwise. This letter represents our views and replicates trades that we are making but nothing more than that. Always consult your registered adviser to assist you with your investments. We accept no liability for any loss arising from the use of the data contained on this letter. Options contain a high level of risk that may result in the loss of part or all invested capital and therefore are suitable for experienced and professional investors and traders only. Past performance is neither a guide nor guarantee of future success.

Bob Kirtley Archive

© 2005-2022 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