Gold Investments Market Update

Gold
Gold rose $11.10 to $945.70 per ounce in trading in New York yesterday and silver was up 18 cents to $17.90 per ounce. Gold and silver have traded in a narrow range in Asian and early trading in Europe. Gold reached new record nominal highs at $952.75 and silver has surged over $18 per ounce to new 27 year highs at $18.06.

Gold also surged to new record highs in British pounds and in euro. The London PM Fix at 1500 GMT yesterday afternoon was at $945. Gold fixed at new record highs at £482.76 and €641.20.

Increasing fears of stagflation drove gold to new record highs (non inflation adjusted highs) in major currencies. Both the ECB and the Federal Reserve have lowered their growth estimates and the Fed has also increased its inflation forecast. The Philly Fed Index fell to its lowest level since 2001 and unemployment news was poor with the 4 week moving average of jobless claims rising 10,750 to 360,500. Meanwhile most commodities continued to rise with zinc and copper surging, leading the base metals higher. Equity markets in Asia and Europe are down and fears of a U.S. recession are sure to be to the fore.

Despite the significant and growing inflation, markets have moved to fully price in a 0.50% rate cut at the next FOMC meeting in March. Central bankers are throwing in the towel in the fight against inflation in order to try and prevent a systemic crisis and a subsequent deep recession. The risk is that they let the inflation genie fully out of the bottle. Thereby wreaking havoc in the form of an inflationary spiral as was experienced in the 1970s (or worse in 1920s Germany which led to order-of-magnitude increases in prices and interest rates, redenomination of the currency and a wholesale consumer flight from cash to hard assets).

A Volker style period of tighter money and short term austerity would be more prudent in order to safeguard the health of the increasingly debased U.S. dollar and in order to help put the U.S. economy back on a more sustainable long term economic trajectory involving less consumption and speculation and more saving, production and exports. Savings are necessary in order to fund capital investment, production and long term economic growth. Unfortunately the U.S., unlike China and its other large creditors, has forgotten this in recent years and bought into the new paradigm fantasy that the service economy and profligate levels of debt and consumption could create a healthy sustainable economy.

Support and Resistance
Strong support in gold is now seen at $890 to $900. Short term support is at $940 and $915. After a short healthy consolidation in the $850 to $935 range, gold has broken out on a daily closing basis. A weekly close above $935 today will be very constructive. A close on a weekly or even daily basis above $935 should see us challenge $1,000 per ounce in a very short period of time.

Silver
Silver is trading at $17.91/96 at 1200GMT. Silver remains extremely undervalued and $25 looks likely in 2008. Silver’s nominal high of $50 per ounce is likely to be reached in the next 3 to 7 years.
http://www.moneyweek.com/file/28810/why-the-silver-price-is-set-to-soar.html

PGMs
Platinum is trading at $2135/2145 (1200GMT).
Palladium surged to over $497/502 per ounce (1200GMT).

The big ‘M’ or momentum is clearly in favour of precious metals. While these markets may be overbought in the short term, markets can remain overbought for long periods and it would be prudent to make the trend your friend.

Newton’s First Law of Motion is important to consider in this regard. “In the absence of a net force, a body at rest remains at rest, and a body in motion remains in motion indefinitely along the same straight line.” While no asset moves in any direction indefinitely they tend to move in either direction in the medium to long term. This was witnessed in stock and property markets in recent years and will be witnessed in the precious metal markets in the coming years.

Mark O'Byrne

Also on news-goldcore-com

Videos

This Little Known Indicator Says Gold Is Still Set For A Major Rally In 2022

David Hunter Stock Market Prediction – DOW 45,000 In 2022

Physical Gold and Silver – Essential for what’s coming – Lobo Tiggre

Blog posts

Is Gold Starting to Behave Itself?

Gold is doing what it is supposed to do!  Equity markets are tumbling, “NASDAQ 100 Rout Erases $1.5 Trillion in Market Value in 3 Days” reads one Bloomberg headline. The big names such as Apple lost over US$225 billion, Microsoft almost US$200 billion, Amazon and Tesla each lost US$175 billion market value over the three […]

READ MORE

This Little Known Indicator Says Gold Is Still Set For A Major Rally In 2022

If you’ve been looking at the gold and silver prices lately and wondering when the broad-based asset sell-off will take the pressure off, then you will enjoy this week’s offering on GoldCore TV. This week David Russell has been speaking to Patrick Karim of NorthStarBadCharts.com, the website that provides technical analysis for the inspired. Patrick […]

READ MORE

The Fed is all set to battle inflation – Really??

“I think he was…the greatest economic public servant of the era.’ It’s common knowledge that Paul Volcker is a professional hero of Fed Chair Jerome Powell. As inflation in the US climbs, the head of the reserve is working hard to channel some of his hero, but not so much to cause alarm. Unsurprisingly gold […]

READ MORE

Featured

Rick Rule- Should You Invest In Gold 2022

READ MORE

Jim Rogers- The Worst Bear Market is Coming

READ MORE
Newsletter
Category
Archives
Popular

No posts available

Videos

This Little Known Indicator Says Gold Is Still Set For A Major Rally In 2022

David Hunter Stock Market Prediction – DOW 45,000 In 2022

Physical Gold and Silver – Essential for what’s coming – Lobo Tiggre

Blog posts

Is Gold Starting to Behave Itself?

Gold is doing what it is supposed to do!  Equity markets are tumbling, “NASDAQ 100 Rout Erases $1.5 Trillion in Market Value in 3 Days” reads one Bloomberg headline. The big names such as Apple lost over US$225 billion, Microsoft almost US$200 billion, Amazon and Tesla each lost US$175 billion market value over the three […]

READ MORE

This Little Known Indicator Says Gold Is Still Set For A Major Rally In 2022

If you’ve been looking at the gold and silver prices lately and wondering when the broad-based asset sell-off will take the pressure off, then you will enjoy this week’s offering on GoldCore TV. This week David Russell has been speaking to Patrick Karim of NorthStarBadCharts.com, the website that provides technical analysis for the inspired. Patrick […]

READ MORE

The Fed is all set to battle inflation – Really??

“I think he was…the greatest economic public servant of the era.’ It’s common knowledge that Paul Volcker is a professional hero of Fed Chair Jerome Powell. As inflation in the US climbs, the head of the reserve is working hard to channel some of his hero, but not so much to cause alarm. Unsurprisingly gold […]

READ MORE

Featured

Rick Rule- Should You Invest In Gold 2022

READ MORE

Jim Rogers- The Worst Bear Market is Coming

READ MORE