Although gold has sold off following the rip higher after last week's FOMC meeting, the gold complex has sold off.... as Kitco news points out here
In my opinion, the sell off is due, in part, to the belief that the Fed's tapering (outright) will occur later this year. Investors can argue over the merits of economic health and how this will affect the Fed's decision, but I am thinking that given Bernanke's recent comments (or Yellen's dovishness if you will, considering she is the supposed front runner on the printing presses) and weak economic figures a pullback in bond buying is unlikely this year. This should only help the gold complex.
More so, the technical outlook also suggests higher prices in gold in the intermediate term. Last Wednesday's move gold and gold equities came on extremely high volume and wide price spreads at or near the previous swing point. Essentially, the move puts a strong floor under the gold complex. However and outside of investors selling on the anticipation of a taper later this year, I think the recent decline just represents weak hands getting of the market. Now would be the time to accumulate.
In my opinion, the sell off is due, in part, to the belief that the Fed's tapering (outright) will occur later this year. Investors can argue over the merits of economic health and how this will affect the Fed's decision, but I am thinking that given Bernanke's recent comments (or Yellen's dovishness if you will, considering she is the supposed front runner on the printing presses) and weak economic figures a pullback in bond buying is unlikely this year. This should only help the gold complex.
More so, the technical outlook also suggests higher prices in gold in the intermediate term. Last Wednesday's move gold and gold equities came on extremely high volume and wide price spreads at or near the previous swing point. Essentially, the move puts a strong floor under the gold complex. However and outside of investors selling on the anticipation of a taper later this year, I think the recent decline just represents weak hands getting of the market. Now would be the time to accumulate.
No comments:
Post a Comment