Gold News: A Confused Swirl

Following gold news these days is like living in a dust devil.  It appears and disappears, and when it appears, it’s swirling around with no consistency.

Let’s start with prices.  Well, that story has been consistent lately – a slow downward trend.  At least that’s what it feels like as we bounce along just above 1200 this morning. A Bloomberg article this morning screamed “gold rout” and it’s hard to argue with that.

But then we see things like this article about gold trading volume shooting up 12% in July (year-over-year). Interest in gold seems to be present, even if it’s not all on the buy-side of the market.

Around the world the picture is confusing as well – confusing in that there are good signs of demand, but price is dropping.  Sales at the Perth Mint in Australia surged in July, while Turkey continues to sweep gold from its citizens into its central bank vaults. This has had the effect of driving local gold prices up, though there is no visible evidence of this on the global markets.

On the long-term front, gold pricing does seem to be following the US Dollar / Chinese Yen currency pair. This is an ongoing story; the baseline is set, and the question is now whether it will continue.

So gold is in a tug of war at the moment, and the winners so far are the downsiders. There isn’t really anything in the picture to say things are going to change in the short term.  But: Is gold setting up for a run to the upside in the mid- to longer-term? Many pundits would say Yes, with some thinking the world is shifting to cybercurrency (think Bitcoin) and gold is a relic of the past.

What do you make of all this?  Do you see clearly in the swirls of confusion?  Show us the way in the Comments below!

Signed, The Gold Enthusiast

DISCLAIMER: No specific securities were mentioned in this article.  The author has some small long positions in gold ETFs and small miners, certainly none big enough to affect the market. We’re waiting for an upturn before doing any real buying!

 Related: Is Gold Facing an Identity Crisis? 

About the author

Mike Hammer

Mike Hammer has had a wide-ranging career, with trading and investing as continuing themes. Mike graduated with a business degree and spent years as a financial advisor, before moving to New York and to pursue a career in IT and education. For more than a decade Mike has been working with the Adam Mesh Trading Group as a stock market and commodities mentor. He’s trained over 200 individuals, spoken at several national conventions, and is a frequent contributor to educational webinars.

Mike writes The Gold Enthusiast daily newsletter, runs the Golden Hammer trading service, and participates in the Mesh Private Portfolio. He also keeps a position in international education which keeps him in touch with "the student mindset".

Mike focuses on the precious metals markets, the energy industry, and the financial sector. His motto is "Plan your trade, then trade your plan!"

Leave a Comment