Minimize

Welcome!

This Week’s Inflation Report Could Change Everything For Gold

April 14, 2014

This is the latest post by Tim. Here are the main points he focuses on…

  • Trouble in Ukraine and a weaker dollar could support higher gold prices over the short term.
  • Investment banks are bearish, but others are bullish as tests of important technical levels lie ahead.
  • If last week’s surge in wholesale prices carries over to consumer prices this week, the outlook for precious metals could change dramatically.

Click here to read the post.

Discussion
2 Comments
    Apr 14, 2014 14:36 AM

    Once again all the above mentioned by Tim is spot on-opinion wise-price is everything and gold MUST take out the above resistance areas or risk backing off….if it can’t take out the barriers above $1332 with data suggesting it should then it will fall from technical resistance holding back any data bullishness “Price is Everything” vs opinion!

    Apr 14, 2014 14:13 AM

    “The strengthening of the exchange rate requires further monetary stimulus,” European Central Bank President Draghi told reporters in Washington on April 12. “That’s an important dimension for our price stability.”
    ———-
    There is your message. It is loud and clear. Draghi was in Washington and stated in the affirmative that monetary stimulus is “required”. Tim has quite a different take according to his article although I don’t know if he wrote it prior to the 12th.

    We can come to one conclusion only. The ECB is intent on introducing its own form of QE and we must therefore prepare for its introduction as it could potentially be quite significant. Earlier in the week Mr Draghi noted that a trillion dollar program was being considered. This could go a long way to dampening the Euro and reducing the disinflationary process that seems to be inevitable based on the past months of falling inflation numbers.

    In fact, the Euro did fall shortly after Mr Draghis comments so the market is beginning to take him more seriously with some openly predicting QE could come as early as two months from now. Some Euro repricing is already underway.

    I cannot understate enough that if the Euro/gold relationship holds or gains strength that this will not be a good year for precious metals. Gold has typically (not always) moved in the same direction of the Euro. If the Euro falls gold will likely fall.

    My 1330 target on gold has been reached by the way. I remain convinced it will begin falling tomorrow.