After experiencing a remarkable bull market run from $250 an ounce in 2001 to $1,900 an oz last summer season, gold has not had a straightforward time of it since. Three times it plunged around 19%, and rallied back, just to run into resistance every time at $1,800. It is possibly doing so once again.
That’s possibly baffling investors who’ve been viewing so numerous big-name analysts and fund-managers become very bullish for gold, with thinking that seems sound. The newest Reuters poll reveals precious metals analysts became much more favorable for gold and silver than they have been in a few months.
Even technical evaluation was backing the bullish outlook
My technical indicators initiated a sell signal on February 19, almost exactly at that peak, but had me and my clients back on a buy signal in mid-August and back into a 20% position in the gold etf GLD.
The case for gold, at least from the fundamental side, still appears bullish.
As Ray Dalio, chief investment officer at Bridgewater Associates, the world’s largest macro hedge fund lately told CNBC audiences, “We have a situation exactly where there is a lot of debt, which leads to central banks printing money, which is bullish for gold.”
Other analysts add that fears of the looming ‘fiscal cliff’ in the U.S., and probability that rating firms will downgrade the credit rating of the U.S. again, are positives for gold throughout the next few months.
There’s also the anticipation that the Fed’s latest QE3 program will be inflationary, and gold is the conventional hedge against inflation.
Then there is a brief history that gold frequently (but not often) moves opposite to the U.S. dollar, and the dollar has been in a decided decline since July.
Could gold probably be saying that the ‘fiscal cliff’ will be successfully solved? Or perhaps central banks are likely to vigorously sell gold from their reserves to raise cash to assist with their financial debt loads? Or that the global financial recession will continue and lead to deflationary pressure rather than rising inflation?
I do not have the response to those queries, yet I can certainly assist you answer some of your other gold questions. Take a look at my own site for more info: Bullion Direct.
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