Gold

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  • Gold continues to bounce along a trough, but there is hope.

    The Barbarous Relic

    Keynes and others may have referred to gold as a barbarous relic, but many investors continue to track it.  In early January, we warned that gold appeared to be breaking out of a short-term bottoming pattern.

    It had taken out a three-month downtrend line, which we suggested was part of a triangle pattern.  Gold also traced out a double bottom pattern.  The triangle pattern pointed to a move toward $1110 and the double bottom projected to around $1135.  The yellow metal poked through $1157 today and remains near it highs in late turnover.

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  • Gold could be forming a bottom ahead of a leg up?

    Could Gold be Forming a Bottom?

    With equity markets tumbling, escalating tensions between a Saudi-led Sunni bloc against Iran, ongoing hostilities in Syria, North Korea testing what it claims to be a hydrogen bomb, the once precious yellow metal is looking perky. 

    Gold recorded a six-year low in early December (on the same day the euro fell to $1.0525 when the ECB met).  That low (~$1046.45) retested a fortnight later (~$1047.75).  Between the two lows, gold reached almost $1089. If this is a double bottom, the minimum measuring objective is near $1132. 

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  • Approximately one-half of the latest gold rally appears to be due to the yuan.

    Dissecting the Recent Gold Rally

    The price of gold rallied by about 5.25% off the five-year low set in late-July near $1172 an ounce  to the high set earlier today.  More than half this rally took place this week, seemingly in response to the heightened uncertainty as China changed its currency regime. 

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  • Perhaps the falling price of gold means the end of the financial crisis.

    Is the Falling Gold Price Signaling the End of the Financial Crisis?

    Gold prices have tumbled to a five-year low. As a tradeable commodity, the price of gold is largely linked to supply and demand. While supply remains fairly fixed, demand is shaped by the state of the global economy and investor perceptions of gold’s value as an asset – this is in turn shaped by the strength of the US dollar.

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