Given the headwinds facing gold, it’s held up surprisingly well. The bitcoin phenomenon, bullish equity markets, a strong economy and rising interest rates are all traditionally negative for gold. Gold has had a pretty good year, considering. It’s trending higher and I think there is a good chance of it taking another leg up sooner rather than later.
Right now talk of bitcoin is everywhere. I can appreciate some may find it tiring. The reason the conversation has merit however, has nothing to do with the surging price. At least, it shouldn’t. The price is merely a consequence of the bitcoin architecture.
Apparently, when the French metro was being built in the late 19th century, The builders asked the local bakers to make a thinner, longer loaf that the men could break with their hands, allowing them to leave their knives at home. Et voila, the baguette came into being!
Australian gold miner shares fell after the US Federal Reserve´s meeting yesterday. As predicted, the Fed kept the interest rates on hold at 1%–1.25%.
If gold price breaks through US$1,370 it could indicate the start of a new long term uptrend. And this is why it’s rising. The real story behind gold’s rise — and the biggest financial story you’ve never heard of this year — is the declining US dollar.
The recent breakout for gold is bullish. It sets up the precious metals for higher prices longer term. But instead of buying into all the reasons why gold will go higher long term, it’s better to not even know. Ignorance is bliss.
US politics is not looking like it’s going to be a beacon of calm over the rest of the Trump presidency. And the massive US debt ceiling problem is not going away. Such volatility usually triggers more investment into safe haven assets. To my mind Gold could be the big winner in the short term.
I’ve been doing a lot of work on the sector for the past few months. As a contrarian investment idea, oil is intriguing right now. It’s off the radar of most investors, yet it’s more in demand than ever before.
For me, the way to trade gold is simple. That is, don’t have a big bet either way until it breaks out of its trading range.
In today’s Money Morning…threats and childish insults on the international stage…investing in fear as the sabres rattle…a new way to trade fear…and more…