Gold Analysts Can’t Read the Future

September 25, 2015 | By | Reply More

Can you remember how excited so many technical analysts became when gold hit a double bottom at the end of July followed by another near bottom early August. In tech speak, double bottoms lead to a rising price and sure enough within three weeks gold had risen from $1085 to $1162.

Euphoria reigned only to see a pull back of over $ 30 within three days and, until now, pottering around $1105 to $1140. Nary a whisper from those analysts forecasting a steadily rising price now that the worst was over.

Conflicting Opinions, Buy or not to Buy

In the meantime in the other camp, the fundamental analysts were trying to decipher the almost daily outpourings from assorted Fed, banks and media pundits together other news stories mostly interpreted as bearish to gold. The most infamous of misleading opinions, encouraged by the Fed was the probability, later changed to possibility, of a rate rise.

Events Overtake the Gold Market

So what can we learn from the last few weeks and months. For starters, that whatever the competence of the technical analysts their interpretations, particularly in the precious metal market is very quickly overtaken by events. Gold analysts can’t read the future

Believe or Believe it Not!
That the utterances of the fundamentalists and all the assorted mouthpieces feeding us with their self serving opinions of the financial and economic landscape are not to be trusted with influencing Joe Publics investment decisions.

The Future and Unexpected Consequences

OK, so what can the ordinary retail investor do to get to the heart of the matter? Our interest here is in gold and other precious metals but some guide lines are appropriate to all investing decisions.

Most important is to understand that nobody on Gods earth can know the future, minute by minute, let alone month by month or year by year, and this applies to all walks of life including of course stock prices, company performance, government acts etc.

Just think of the unexpected and unanticipated reactions that are occuring daily on the stock markets. Think about the VW scandal, who would have thought of it at the beginning of the week. Nobody can be sure when a bottom or top is in when trading.

QE., Paper and Gold Scams

Back to gold. Of all the currencies introduced to us, the gullible public, over millenia, from salt before the Egyptians, to paper in our times, gold has been the only universally tradeable and tangible currency.

Today the currency wars are in full flow with nations, China in the forefront, devaluing in order to get an edge in trade. QE has been shown up as the sham it was always going to be, with little or no money reaching the consumers to spend in order to revitalise the economy, just making the already wealthy even richer.

Now we learn that Comex, the exchange where gold futures are traded and who guarantee delivery has only around 185,000 ounces in its vaults, a record low. For every ounce there are over 220 traders who could claim that one ounce.

Futures trading on Comex is highly leveraged and virtually every contract is traded on so expecting delivery is a rarity. The point is that bullion holders have been withdrawing their metal for sale, leaving Comex short and possibly even shorter in the months to come. Ask yourselves why.

Patiencc is a Profitable Virtue

Holders of gold should be patient and ignore the siren calls of both technical and fundamental analysts. It would be wise to hold at least 10% of your assets in gold, if not more, and not worry whether this a good time to buy or not, nobody can call a bottom! Today is as good a time as any.

Our preference is owning physical metal and it can be traded easily on line with the worlds largest on line bullion market As governments and banks self implode, be assured that gold will always retain a value.

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Category: Gold

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