Will Gold Plunge Further Now $1800 Resistance Is Broken?

December 12, 2011 | By | Reply More

Spot gold started the week trading up $5.00 at $1715.00 an oz. in early Eastern trading before falling through $1800 resistance before the European open and continuing its descent when the US market opened.

Euro Debt Grows Day by Day

The procrastinations of the EU politicians and technocrats in solving, or at least making a believable attempt, as its mountain of debts grows day by day is undermining stock and commodity markets world wide.

At this moment in time Europe has taken center stage as confidence ebbs in the single currency. Tomorrow it may be the dire straits of the US economy that further drives traders lack of confidence.

After that fears that China’s over heated, and hyped up, economy is finally combusting may signal yet another fall in the markets, perhaps crash dive would be more descriptive of those financial consequences!

Prosperity Will Return, Wish We Knew When!

If there is a light on the horizon, a beacon of hope, we are yet to recognize it. History tells us that however disastrous the events that occur are, eventually hope in the form of peace, progress, normality and/or prosperity return to mankind and his markets. Given time all will be well as long as we can adjust to a new world order.

 

Some Investors Will Fail, Others Will Prosper

Until the dawning of this next new era, those determined enough will endeavour to at least maintain the standards of living to which they have become accustomed. Some will fail, others will invest in gold, silver and other rare precious metals.

Among those that succeed many will have understood, and acted upon, one fundamental factor. It is that the supply of precious metals is finite whereas the supply of fiat currencies is infinite and never ending as long as the printing presses don’t all break down at once.

 

Beware Technical Indicators When Politicians are Yackity Yapping

Which brings us back to today’s events in the gold market. Half an hour before the US markets officially opened, spot gold had tanked to $1665 an oz. By the time we post this article the US will have opened.

Right now it looks as if the Dow will be down, maybe falling through the 12000 barrier, this is likely to further hurt gold. Day traders may see this as an opportunity to short the metal which seems to us to be a reasonable gamble. But we urge caution on any longer term short or long speculative play.

In the current volatile situation embracing stock, commodity and forex markets, please, in no circumstances rely on any technical indicators, however successful your particular favorites have been in the past, to play the precious metal markets.

Utterances from European US and other world leaders and their sidekicks can and do get reflected immediately in market action whether contradicting the previous half baked idea to solve the worlds problems or adding another layer of flim flam to buoy up political egos.

 

Precious Metals Remain the Most Viable Safe Haven

We remain unshaken in our belief that gold, silver and to some extent PGMs are the only truly viable long term safe havens for maintaining the value of our assets as the world eventually sinks into hyperinflation.

What we dare not suggest is that this is a good time to buy into the metals.

As investor confidence evaporates and their desire to keep their cash under the mattress increases, so precious metals may lose further ground.

When the day eventually dawns that investors appreciate that their cash is losing purchasing power faster than they can find any stock or bond that will compensate them for their depreciating dollar, euro, GB pound or many other currencies they will, of necessity, turn to gold and silver.

When that day arrives, no amount of manipulation of the precious metals market that governments and central banks can effect will stop the metals soaring through $1800 an oz and far beyond.

In the first hour of Wall Street trading the Dow was down to 12039 and spot gold a further five dollars off at $1660 an oz. Our final thought is that the markets are getting more and more dangerous in the run up to Xmas.

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Category: Precious Metal Investment News

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