Gold Investor
- Author Justin Hsu
- Published October 5, 2018
- Word count 513
Gold Investor Update: September 12, 2018
So far this year Gold has not been the place to be unless you bought it in mid December 2017 and sold it in late January for a roughly ten percent gain. Since a high of $1,362 per ounce on January 25 gold has been in fairly steady decline that has recently seen it bouncing around the $1,190 mark. In the short term it looks to be going lower. As any experienced investor knows, it is when something is out of favor with little positive sentiment; it is the time to start looking at it closely.
As most investors know the most important medium term determinant in the price of Gold is the strength of the U. S. dollar against other currencies. In this regard the medium term price of Gold chart is an almost perfect inverse mirror of USD Index chart both in direction and percentage terms. There are of course some important longer term factors that will come into play that determine the relative percentage movements and these must not be forgotten but predicting the price of gold in the short and medium term largely involves predicting the strength of the U S dollar. Major geo-political events can certainly create large upside movements but are usually short lived and almost impossible to predict. Experienced gold traders will sell into these events.
So to the U S dollar. It has been beating up world currencies for some time now with no immediate signs of stopping. For anyone expecting a big turnaround in Gold, a good look at the 20 year chart of the USD Index, is a reminder that the bottom may be a long time coming. What becomes obvious is roughly a six to eight year pattern that more or less coincides with the general business cycle. Now depending on how one interprets the chart, the latest upward wave began in 2014 and will not reverse until 2020 at the earliest. Again, subject to technical interpretation, we could see a cycle completion in 2020 with the USD Index in the 115 to 120 range. This would represent a 20 or so percent increase from the current trading range of 95.If the price of gold price does the normal historical correlation we may see the price drop to as low as $950 an ounce.
For the average investor it is important to keep the above logic in mind. Much of what is written about Gold is produced by what are called "Gold Bugs". These are people who either because of genuine belief or vested interest see all things pointing to scenarios where Gold goes to $5,000 or even $10,000 an ounce. Some of their arguments are quite compelling particularly when talking about massive government debts, bank failures and other financial catastrophes. History does repeat itself and there will be another melt down. We just don’t see it happening for two or three years.
In any event we recommend that all investors keep a minimum of three percent of their total portfolio value in actual physical Gold in small denominations just in case the Gold Bugs are right.
Justin Hsu, Commodity Analyst
Justin Hsu is a commodity analyst with over 10 years of market experience. www.asiaassociates.com
Article source: https://articlebiz.comRate article
Article comments
There are no posted comments.
Related articles
- SCOFI: Pioneering Venezuela’s Petroleum Industry for Over 65 Years
- To Understand Risk, Start By Asking What You Don’t Know
- How To Make Money On Binance: A Full Guide
- Airbnb Investment 101: Tips for New Hosts in Australia
- Indian Gold Demand Rebounds During Important May Festival
- The Investment Terrain in Crypto, Blockchain, and Web3
- Exploring Bitcoin: Corporate Giants Embrace the Cryptoverse
- The Significance of Static IP Address for Trading
- TYPES OF FOREX REGULATIONS
- Weekly Events: Avalanche & Chainlink Collaboration, CommEx Closure, And More
- Assani Elolo Ronaldo - How Bank Instruments Facilitate Gold Deals
- Crypto News: Mempool Solana Shuts Down, Police Integrate Cardano Into Their Work, WhiteBIT And FC Barcelona Launch New Course
- Is Crypto Entering 2021 Vibes?
- Bitcoin Updates All-Time High In Momentum Amid Its Scarcity
- Analyst Announces Bull Run Start, Cites Stock-to-Flow Strategy
- Weekly Crypto News: Telegram Pays Toncoins, WhiteBIT Is Now TradingView Broker And More
- undetectable banknotes
- Unlocking Financial Success: Why Successful Portfolios LLC is Your Best Advisor
- Are EVs a Threat to the Republic?
- A Deep Look Into Binance: Can It Really Be Trusted?
- Ledger Live - Most Trusted & Secure Wallet - Ledger
- Decoding the Future: Navigating the Crypto Landscape
- Don't Cry for Me General Motors
- Investing in exponential growth stocks: what can you choose
- Leveraging ChatGPT AI for Smarter Stock Market Analysis and Investments
- Shib, Doge, and Pepe Have a New Competitor: The Rise of $FUFU Token
- Unlocking Wealth: The Power of Apartment Syndication in Real Estate Investing
- 6 Reasons to Invest in Bitcoin
- Blockchain and AI Convergence: A New Era of Innovation
- Financial Planning for Small Business Owners: Tips for Success