Just out, made me laugh....Bloody joke this story. When you see these stories we know Gold is going to the next level up. Rome burns and Gold always wins.....
Recent surge in gold prices is an opportunity to sell
During the secular bull market in gold one of the strongest arguments cited in its favour was the currency devaluation that took place in United States. That rubbed off positively on the gold prices and created expectations of a never ending bull market. However in the last few years gold prices have declined by almost 45 per cent from its peak seen in 2011. It is quite a setback for bullion bulls to see the biggest of central banks embarking on large monetary policy easing but gold unable to respond in a similar manner. In the last few quarters ECB introduced a large monetary easing by purchasing of bonds. Bank of Japan continues to follow loose monetary policy through “Abenomics”. Recently China has come forward as the most aggressive central bank of become dovish and loosen its monetary policy. It has cut its benchmark interest rates 5 times in last 9 months, cut reserve ratio requirements, weakened its currency and added liquidity to its banking system. This colossal amount of new money into the system has not favoured gold in an appreciable manner even as US Federal Reserve has kept its Zero Interest Rate Policy (ZIRP) intact till now. This clearly indicates that globally gold safe haven appeal has diminished to a large extent and its investment demand is slack. The recent surge to six-week highs in gold was largely the result on short covering from $1075/oz to $1170/oz at COMEX and from Rs 24500/10gm to Rs 27700/10gm at domestic markets, in which traders bought to offset bearish positions, after currency and stock market instability, continued weakness in China's currency after a devaluation this month, and thoughts that the events may cause the Federal Reserve to postpone tightening of monetary policy. We are in a market where commodities have generally come under pressure, particularly those with exposure to China; as a financial asset, there's a temptation to take some money out of that to cover losses elsewhere. There has been some positivity surrounding gold as insurance, but that can't outweigh everything else. This short term uptick in gold may well serve as an entry point for an eventual break of $1000. A recovery in U.S. equity markets and positive economic data is taking some momentum away from gold prices and it looks like, prices have made short-term top and will continue its weakness due to following: •It is a disinflation environment, a low growth environment, negative for commodities. Emerging currency markets are still in turmoil early this week, which is by itself a very worrisome development for the world market place. •Adding to the uncertainty in the market place at present is whether or not the U.S. Federal Reserve will raise interest rates at its September FOMC meeting. After this week's extremely volatile price action in many markets, there are growing doubts the Fed will be able to make a rate hike in September, or even this year. •Gold has failed to rally in the face of China's stock market crisis as investors, scorched by a brutal end to the market's 12-year bull run, chose cash and bonds for safety over bullion while they seek clarity on the timing of a US rate increase. •Despite the policy action from China (interest rate & RRR cut), the weakening outlook for global growth may continue to foster a bearish outlook for the precious metal as demand falters. •Technically, gold prices reversed from important resistance of $1170, which was 100DMA and 61.8% Fibonacci retracement of downtrend from $1225 to $1075. If prices sustain below $1125, technical setup would turn more bearish targeting $1100 and eventually a move towards $1000. Momentum Indicators have also reversed from overbought condition and suggest a breakdown in prices.
