Daily Market Update

Gold Investments Market Update

Gold fell yesterday (both gold and silver were down some 1%) in volatile trade which saw some very determined selling each time gold looked set to break out above $930/oz. There appears to be support at $890/oz to $910/oz and resistance between $930/oz and $960/oz.

As usual gold’s safe haven properties were seen yesterday as most international equity indices were down some 3% to 5% while gold fell only marginally. This has been the pattern in recent months and years when gold can be somewhat correlated to equity markets in the very short term (often falls but falls by less than stock markets) but is inversely correlated over the medium to long term (as seen in tables below).

Besides the uncertain outlook for equity markets, gold is also being supported by weakness in the dollar today and expected dollar weakness in the coming months as the Federal Reserve’s balance sheet deteriorates further and US budget deficits and the national debt rise very significantly.

Oil has recovered somewhat from yesterday’s sell off (up 1.7% this morning to over $49 per barrel). Gold has clearly decoupled from oil in recent weeks and months but should oil begin to creep up again as many analysts believe is probable, gold will likely move up in unison as investors attempt to hedge themselves from the burgeoning threat of inflation.

The first quarter has seen gold (and especially silver) again outperform most asset classes with gold rising in all major currencies (as it did in 2007 and 2008). Gold is up more than 4% in US dollar terms, nearly 10% in euro terms and 7% in British pound terms.

This outperformance is set to continue as the international financial and economic system remains close to collapse (as warned of by George Soros at weekend) and governments are attempting to avert deflation by debasing their currencies in an unprecedented manner and this will likely lead to stagflation in the coming months.

Mark O'Byrne
Executive Director

Read more...
Category
Archives
Popular

Gold steady; U.S. govt shutdown worries investors

Gold and Silver Bullion - News and Commentary Gold steady; U.S. govt shutdown worries investors (Reuters.com) Stocks Mixed, Dollar Flat With Shutdown in Focus (Bloomberg.com) Palladium flows from west to east to meet industry demand (Reuters.com) METALS START THE WEEK ON[...]

READ MORE

Gold ETF Assets Climb to Highest Since 2013

Gold and Silver Bullion - News and Commentary Gold ETF Assets Climb to Highest Since 2013 (Bloomberg.com) Gold firm as dollar sinks further (Reuters.com) Australia Is Cashing In on Gold ETFs (Bloomberg.com) South Korea now requires verified ID to trade cryptocurrencies[...]

READ MORE

Central Bank Of Russia Adds A Record 223 Tons Of Gold In 2017

Gold and Silver Bullion - News and Commentary Gold steady on weak dollar; stocks surge as U.S. government shutdown ends (Reuters.com) Asian Stocks Reach Fresh Record High; Oil Climbs (Bloomberg.com) U.S. Stocks Gain as Senate Votes to End Shutdown (Bloomberg.com) Demand[...]

READ MORE