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Forex Trading: Why You Need to Look Past Fiscal Cliffs

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The "fiscal cliff" agreement did not set the course for EUR/USD -- here is why.

By Elliott Wave International

First, a word on how we all are conditioned to think that, "momentum will remain constant unless acted on by an outside force." Read this excerpt from Robert Prechter's May 2004 Elliott Wave Theorist:

"...'Momentum will remain constant unless acted on by an outside force.' This mode of thought is deeply embedded in our minds because it has tremendous evolutionary advantages. When Og threw a rock at Ugg back in the cave days, Ugg ducked. He ducked not necessarily because his mind had inherited and/or learned the consequences of the Law of Conservation of Momentum.

"The rock would not veer off course because there was nothing between the two men to act upon it, and rocks do not have minds of their own.

"Earlier animals that incorporated responses to the laws of physics lived; those that didn't died, and their genes were weeded out of the gene pool. The Law of Conservation of Momentum makes possible our modern technological world. People rely on it every day.

"Despite its use in so many areas, however, it is inapplicable to predicting [the financial markets]..." Continue reading "Forex Trading: Why You Need to Look Past Fiscal Cliffs" →

Could Chevron Jumpstart the North American Natural Gas Sector?

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Could Chevron Jumpstart the North American Natural Gas Sector?

The natural gas sector ended the year on a high note following the announcement that one of the world’s leading energy firms has agreed to operate — and buy a partial stake in — a proposed liquefied natural gas (LNG) project on Canada’s British Columbia coast.

Kitimat LNG’s project moved a step closer to reality last week when Chevron (NYSE:CVX) announced that it will buy out the minority positions that Encana (TSX:ECA,NYSE:ECA) and EOG Resources (NYSE:EOG) hold in the endeavor. In doing so, Chevron has established itself as a 50-percent owner in a project that is ready for construction, but has fallen victim to a number of delays amid uncertainty surrounding sales contracts.

Chevron also confirmed that it will take a 50-percent interest in approximately 644,000 acres of petroleum and natural gas rights in the Horn River and Liard Basins in British Columbia. Chevron and Apache (NYSE:APA) will now share ownership of the project, with Chevron operating the plant and related Pacific Trail Pipeline, which is set to transport oil from Northeastern BC. Continue reading "Could Chevron Jumpstart the North American Natural Gas Sector?" →

Leonard Melman Finds the Fiscal Cliff a Boon for Precious Metals

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The Gold Report: Leonard, what are the most pressing issues facing investors today?

Leonard Melman: Let's start with the fiscal cliff. If America falls into this abyss, the combination of tax increases and spending reductions will slow down economic growth. Interestingly, political leaders in Europe are calling for increasing taxes and decreasing spending in order to solve their problems. I find it amusing that the solution to economic problems being proposed by leaders on the European side of the Atlantic is thought to be the problem on the American side of the Atlantic.

TGR: How do you account for the disconnect?

LM: It is due to a philosophical inconsistency and a lack of economic understanding on the part of the world's political leaders, most of whom are not well qualified as economic thinkers, nor as philosophers for that matter.

TGR: How important is a philosophical stance to making a cogent economic analysis? Continue reading "Leonard Melman Finds the Fiscal Cliff a Boon for Precious Metals" →

Silver Slides into the Holiday Season, but Upswing Expected in New Year

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The feeling of Christmas may be in the air, as the classic holiday jingle goes, but silver bells are definitely not ringing this holiday season. The spot price of silver started off the week on a downward slide that by Thursday had led it to its lowest level in four months. That was the result of the white metal playing up to its precious metal side, tracking gold and ignoring the industrially positive third-quarter US GDP (up 3.1 percent on an annualized basis); it followed its yellow cousin’s lead in a sharp sell-off Thursday morning, touching a low of $29.51 an ounce to close near the psychological level of $30 an ounce, down nearly nearly 4 percent on the day. Continue reading "Silver Slides into the Holiday Season, but Upswing Expected in New Year" →

Rohit Savant Expects the Gold Bull Market to Pause in 2013

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The Gold Report: Rohit, in a recent interview you said gold is "not a guaranteed safe haven." In your view, what are effective ways to preserve capital?

Rohit Savant: If you're talking about preserving capital, it depends a great extent on your timeframe and your risk appetite.

"When the fiscal cliff debate intensifies as we get closer to the deadline, we may see the gold price rise in response."

If you're looking at the short term and want no fluctuations in your principal, the best way to preserve it would be either certificates of deposit or T-bills and hope that inflation doesn't rise significantly.

But if you are looking at the longer term and are willing to take some ups and downs in your capital, a better way of preserving or increasing your capital would be investments in equities, real estate and gold. You could reduce the risk a bit by purchasing dividend-paying equities.

TGR: Do you believe gold is an effective way to preserve capital?

RS: Over the long term, it is. In the short term, you are going to see fluctuations in prices.

TGR: What range do you expect gold to trade in through the first half of 2013? Continue reading "Rohit Savant Expects the Gold Bull Market to Pause in 2013" →