Looking back at the past eleven weeks, the gold market made higher lows and has held above the 2011-2012 double bottom. Gold also seems to be forming a bullish triangle, or an ascending triangle which is indicative of a continuation pattern. We are back above 1600 physiological level and look to be getting closer to 1640’s and above, that I believe we are off to the races. I think most of the volatility from the past six months or so has much to do with Q.E. on or off market noise. In regards to “quantitative easing”, I think we have to look back at history. Countries from time to time default; this is nothing new and is more common than most people think. The bottom line is it is highly unlikely that Greece, Portugal, and Spain are going to pay back their loans. Countries can only get lending up until the point where lenders perceive they will not be paid back; in the case of Greece, Spain and Portugal I think lenders believe they will not be getting all of their loaned money back. As we look towards Italy and France, they may be next up on the debt yield rally. Countries can’t magically make heavy debt loads disappear without growth, and it seems that most of the countries that are getting hit the hardest are at a capitulation point where their debt burden is so high that it suffocates growth. Quantitative easing didn’t work the first time nor did it work the second time, and Bernanke and the ECB know that. I think central planning tries to kick the can further down the road until after U.S. elections. There has to be debt forgiveness or in other terms “default” and in order to hedge themselves, I think central banks buy more gold in hopes to insulate themselves from the upcoming strategic defaults in Europe and also here in the US. I strongly feel that gold will continue to move higher as a result from ECB intervention and fund buying and really take off after the U.S. elections. Gold looks like the bottom is in for now and setting up for the next move.
Series 3 Licensed
Senior Commodities Broker
Daniel started his career as a broker with Lind-Waldock in 2007. He is well diversified in the markets with the indexes and currencies amongst his favorites. Daniel can often be found quoted in industry sources, such as Bloomberg, Dow Jones Newswires, WSJ and Futures magazine..... Read More
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