Price is still above the 61.8% Fibonacci retracement line on the monthly charts at the $1155 level.
The bulls have scored $25 from the close of the week ending on March 13, 2015 and that sent Gold above the short term downtrend beyond $1180 (highlighted in red on the chart above), which started in January when the metal hit $1300. Continue reading "Metal Tactics: Gold And Silver"
Stocks are trading close to all-time highs and valuations are well above average with a P/E of 19.72 compared to the historic median of 14.57. At first glance, it might seem as if there's no value to be had in this market, but when one asset class thrives, it generally means another is struggling.
Right now, commodities are the unloved asset class by investors. A strong U.S. dollar and booming stock market have driven prices lower as demand favors equities. However, the tide could be on the verge of turning, putting one precious metal in a position to flourish.
For contrarian investors, silver looks like a bargain right now. This chart shows silvers prices at 5-year lows – a good sign for those looking for value opportunities.
Chart courtesy of StockCharts.com
Now take a look at the signals silver is giving investors right now. It's trading below it's 200-day moving average of $17.91 which is a sign that's it's being undervalued. What's more important though is what the Bollinger Band Width is saying. It tracks volatility and identifies when a potential squeeze might occur. Hovering at around 10, less than its 200-day moving average, it could be a signal that silver is getting ready to rally to the upside. Continue reading "This Shiny Metal Could Be In Bargain Territory For Value Investors"
Would you say that Janet Yellen was some sort of silver tongued wizard? After this week’s rate decision the answer might be yes, because otherwise it’s close to impossible to explain how the Fed Chair was able to come across as sounding both hawkish and dovish in the same speech. On the one hand, Yellen dropped the word “patience,” suggesting that interest rates could rise within any future meeting, with most Fed members in favor of a rate hike in 2015. On the other hand, Yellen pointedly stressed that rates would rise slower than previously anticipated and outlined her concerns on low inflation and wage growth. This “impossible” combination of hawkishness and dovishness resulted in dazed and confused markets, and investors it seems are having difficulty deciding which way the wind is blowing at the Federal Reserve, with the hawks or with the doves. Given that, they’re collectively trying to gauge whether the dollar is now a buy or a sell?
Soon after the Fed statement was made, it was a stampede of sellers, bulls running out of dollar positions, and the greenback in a nose dive, shedding more than 2% in less than 3 hours. Yet the following morning, as trade opened in London, everything flipped once again; the dollar was higher and ended up more or less where it is was prior to the Fed decision. Continue reading "Dollar Volatility Coming Your Way"
Perhaps you didn't hear about it, or if you did you dismissed it because of who said it, but I found some comments by Greece's finance minister over the weekend about the European Central Bank's quantitative easing bond buying program very insightful – and in synch with my own thoughts.
Speaking at the Ambrosetti Forum in Italy over the weekend, Yanis Vardoulakis warned that the ECB's purchases of sovereign bonds, which started last week, will create an unsustainable stock market bubble that is unlikely to boost private-sector investments in the euro zone.
"QE is all around us, and a great deal of optimism hangs on it," Varoufakis said in his speech, "Presenting an Agenda for Europe. "At the risk of sounding like a party pooper, let me say that I find it hard to imagine how the broadening of the monetary base in our fragmented, and fragmenting, monetary union will transform itself into a substantial increase in private investment in productive activity." Continue reading "Does QE Really Work?"
The Dollar Index hit a very important psychological level at $100 on Thursday and closed the week above it despite weaker than expected US economic data.
This level hasn't been seen for 12 years. At that time, Gold was at $350-400 level, and Silver was at $5 level. It means that metals prices grew dramatically compared to the Dollar. With the Fed's "guess when I'll lift the rate" game, the Dollar will continue to be in high demand for the foreseeable future. It will put hard pressure on most of the currencies and commodities, including metals. Crude oil already fell prey to the Dollar, approaching a 6-year low below $50. Their negative correlation is very obvious: the higher the Dollar, the lower Crude Oil moves. Continue reading "Gold and Silver Update: The Dollar Trap"
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