Category: ReviewLast October the price of the yellow metal rose back to almost $1800 an oz and all of us gold bugs breathed a sigh of relief. We had waited since September of 2011 for our favorite metal to resume its climb back to its all time high of $1900 an oz.
That $1800 an oz gold price reached at the back end of last year now seems a long way off. By the end of 2011 we were looking at around $1500 an oz. Talk about a waterfall moment but gold shrugged that off and climbed back to within a whisker of $1800 an oz in only three months.
Throughout the world traders in gold and silver have joined in the general lack of confidence as indications of a global slow down gather pace.
Reports from China suggest, despite official denials, that sectors of the economy are facing problems, construction is a case in point, and that the nation may be on a fast track to crisis. As China has overtaken India as world leader in gold imports, the knock on effect on the gold price needs no amplification. One good reason why gold is not about to break out.
Gold has steered clear of that dangerous $1600 an oz support zone which has been causing those investors bullish about the metal so much anxiety. Now trading around $1650, the fear seems to have gone from the market and we expect a period of consolidation before any upward momentum becomes apparent.
The deepening crises and lack of action in Europe has led to a strengthening of the dollar despite the failure in Washington of the so called super committee” made up of both democrats and republicans, to come up with any measures to address the ever increasing US deficit.
There’s bad news, more bad news and then there is the good news, or at least for some of us. Starting with the bad news, as all we stock market players already know, Europe is in ever deepening mire with only the prospect of adding to its already horrendous debt burden as the only solution under consideration as a fix.
As I write spot gold is trading at over $1680 an oz. Just three quarters of an hour into the New York open and yet another all time high. Hardly a surprise when both the US and the European economies are giving every sign that the much heralded emergence from the recession that was triggered in 2008 has been revealed as yet another smoke screen perpetuated on a gullible public by free spending self serving politicians.
What a contradiction the prices of both gold and silver are experiencing to the realities of the economic situation that the world is wrestling with. Our followers will be well aware of the many fundamental factors that we believe should be driving the prices of both metals upwards and yet spot gold has been shaky since peaking at just shy of $1580 an oz. on May 1st to close yesterday in the NY after market at $1532.
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