Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stock Market Trend Forecast 2024 - 15th June 24
Gold Price Consolidating at High - 15th June 24
NVIDIA Stock Market: Price Prediction for the Future - 15th June 24
When Will the Boom/ Bust Rollercoaster End? - 15th June 24
Stock Market Trouble Lies Ahead. Are You Ready For It? - 15th June 24
Stock Market Investor Sentiment - 8th June 24
S&P 494 Stocks Then & Now - 8th June 24
As Stocks Bears Begin To Hibernate, It's Now Time To Worry About A Bear Market - 8th June 24
Gold, Silver and Crypto | How Charts Look Before US Dollar Meltdown - 8th June 24
Gold & Silver Get Slammed on Positive Economic Reports - 8th June 24
Gold Summer Doldrums - 8th June 24
S&P USD Correction - 7th June 24
Israel's Smoke and Mirrors Fake War on Gaza - 7th June 24
US Banking Crisis 2024 That No One Is Paying Attention To - 7th June 24
The Fed Leads and the Market Follows? It's a Big Fat MYTH - 7th June 24
How Much Gold Is There In the World? - 7th June 24
Is There a Financial Crisis Bubbling Under the Surface? - 7th June 24
Bitcoin Trend Forecast, Crypto's Exit Strategy - 31st May 24
Zimbabwe Officials Already Looking to Inflate New Gold-Backed Currency - 31st May 24
India Silver Imports Have Already Topped 2023 Total - 31st May 24
Gold Has Done Its Job – Isn’t That Enough? - 31st May 24
Gold Stocks Catching Up - 31st May 24
Time to take the RED Pill - 28th May 24
US Economy Slowing Slipping into Recession, But Not There Yet - 28th May 24
Gold vs. Silver – Very Important Medium-term Signal - 28th May 24
Is Gold Price Heading to $2,275 - 2,280? - 28th May 24
Stocks Bull Market Smoking Gun - 25th May 24
Congress Moves against Totalitarian Central Bank Digital Currency Schemes - 25th May 24
Government Tinkering With Prices Is Like Hiding All of the Street Signs - 25th May 24
Gold Mid Tier Mining Stocks Fundamentals - 25th May 24
Why US Interest Rates are a Nothing Burger - 24th May 24
Big Banks Are Pressuring The Fed To Losen Protection For Depositors - 24th May 24
Another Bank Failure: How to Tell if Your Bank is At Risk - 24th May 24
AI Stocks Portfolio and Tesla - 23rd May 24
All That Glitters Isn't Gold: Silver Has Outperformed Gold During This Gold Bull Run - 23rd May 24
Gold and Silver Expose Stock Market’s Phony Gains - 23rd May 24
S&P 500 Cyclical Relative Performance: Stocks Nearing Fully Valued - 23rd May 24
Nvidia NVDA Stock Earnings Rumble After Hours - 22nd May 24
Stock Market Trend Forecasts for 2024 and 2025 - 21st May 24
Silver Price Forecast: Trumpeting the Jubilee | Sovereign Debt Defaults - 21st May 24
Bitcoin Bull Market Bubble MANIA Rug Pulls 2024! - 19th May 24
Important Economic And Geopolitical Questions And Their Answers! - 19th May 24
Pakistan UN Ambassador Grows Some Balls Accuses Israel of Being Like Nazi Germany - 19th May 24
Could We See $27,000 Gold? - 19th May 24
Gold Mining Stocks Fundamentals - 19th May 24
The Gold and Silver Ship Will Set Sail! - 19th May 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

What to do with Gold

Commodities / Gold & Silver 2009 Jul 01, 2009 - 07:08 AM GMT

By: LiveCharts


Just as the stock market has been stuck in the mid-8,000 range over the past few weeks, the gold spot rate has been hanging around the $930 per ounce price point for a while. Despite a couple modest swings, gold has traded in a very narrow range between $920 and $940 since it dropped significantly from around $955 on June 11th to below $930 on June 15th.

Virtually all speculative markets traded flat during the last half of the month of June. Speculation in anything is generally driven by a sense of hope, which creates an upbeat movement, or a sense of fear or despair, which drives downward movement. Lately, there is only a sense of uncertainty, as investors are still watching for data and signs of a certain direction for the global and US economies.

There have been several positive data reports of late, but nothing in the way of a trend developing. Housing has performed modestly better in the last two to three months. Retail appears to be slowly stabilizing. Manufacturing and production are grinding forward. But, data and commentary also indicates the recovery, that many have predicted is coming, will take time and patience.

With little to drive markets in one direction or another, most speculative arenas have settled into a narrow trading range. Investment in gold is usually pushed by concern about the risks of investing in other more unstable or uncertain markets. Gold is the safe money investment. Just as investors are unsure about how much risk to take on, they aren’t sure about the need to pull more risky investments to buy gold.

The trend of uncertainty has actually played out longer than the last few weeks. Gold has effectively ranged from around $870 to a high of $993.20 per ounce since bouncing in the latter half of January. That is roughly a $120 range for a little less than six months of speculation.

Another big reason why gold has remained largely trendless in the near and medium terms is that the dollar has shown little movement as well. Gold and dollar typically move in an inverse relationship because people, and governments, tend to pull reserves of the greenback in favor of safer gold when times are tough. They then usually look to get back into the dollar for cash reserves when conditions are favorable.

The dollar has been very narrow in its trade against most major currencies following a bit of a slump. After moving past $1.40 and $1.65 in value, respectively, the Euro and British Pound have sense traded flat against the dollar. Each of the major European currencies gained steadily against the dollar from mid-January through mid-May, but since May 22nd, each has stayed in about a five pip trading range. The dollar-yen has traded in around a seven pip range since the middle of February.

It won’t take long once the economy and the market pick a direction for gold to break out. If data and sentiment break powerfully in favor of a recovery, gold would likely dip. Renewed signs that the turmoil could be extended might push gold toward a retest of its all time high just above $1,000 per ounce.

Neil Kokemuller

Neil Kokemuller is an Associate Professor of Marketing at Des Moines Area Community College in Des Moines, Iowa, USA. He has a MBA from Iowa State University. He is also in house stock market commentator at Live Charts UK, where you can find real time charts and share prices .

Copyright © 2009 Live Charts

Please note: The information provided in this article is intended for informational and entertainment purposes, and not as advice for financial decisions or investments. Actions taken on the basis of the information shared is at the sole risk and discretion of the individual. Currency investment poses significant risk of loss.

Live Charts Archive

© 2005-2022 - 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