Among the many factors that we can point to as being influential for precious metals, we have covered just one of them; however, this is an important week for both of them.
If on Thursday the ECB do reduce rates, then the Euro could fall exerting upward pressure on the dollar which would be negative for gold. We also have the job numbers and if they are satisfactory, then tapering will continue unabated which is having a positive effect on the dollar, so gold could have to endure a double whammy this week.
Either way it looks like being a volatile week for the markets.
A quick look at the chart and we can see that gold’s decline is accelerating so a re-test of the June lows now looks to be on the cards.
Finally we are keeping the lion’s share of our funds in cash until the investment environment for the precious metals sector improves. We know that this stance offers little in the way of excitement and many of our peers are super bullish, but acquisitions of gold, silver and mining stocks could be cheaper still given a little more time for this bear phase to exhaust itself.
Got a comment, fire it in, the more opinions that we have, the more we share, the more enlightened we become and hopefully our ‘well informed’ trades will generate some decent profits.
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