Gold ain’t goin’ anywhere anytime soon unless the US$:
- takes another exponential run-up or
- a great big nosedive
and I don’t think either of those events is about to happen. Here’s why.
The commentary above & below consists of edited excerpts from an article* by Mickey Fulp (MercenaryGeologist.com).
…Gold has not reacted to significant geopolitical unrest in several regions of the world over the past year, including several new conflicts in the Middle East, the Russia-Ukraine civil war, higher incidences of radical Islamic terrorism, and most recently, a refugee crisis in Europe.
Widespread fear and panic in the financial markets is often a catalyst for gold buying as a safe haven and results in a rising gold price but that will occur only if investors lose confidence in the world’s banking system as they did from late 2008 to late 2011.
Annual price inflation remains very low in developed countries despite the devaluation of major fiat currencies. The world economy is undergoing a deflationary event and that does not bode well for a significant rise in the gold price.
Lower gold prices in mid-July to early August, and the recent upticks, can be attributed to seasonality, i.e., the usual summer doldrums followed by the Indian festival and wedding seasons.
I also expect strength in gold as the December holidays approach but for the short-term, I see no compelling reasons for gold to break out of its year-to-date range.
*http://news.goldseek.com/GoldSeek/1445283817.php (Copyright © 2015 Mercenary Geologist.com, LLC. All Rights Reserved)
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