Weaker Dollar Boosts Gold

Weaker Dollar Boosts Gold

The price of Gold getting a little boost from a slightly weaker U.S. Dollar and concerns over Italy’s budget crisis.

Yesterday, traders holding on to long positions were again disheartened that for the 4th consecutive session, the price of Gold was unable to settle above its 100-day moving average despite seeing the continued decline of U.S. stocks.

Today, it’s a different story as we currently see the price of Gold trading above the spot 100-day moving average, which is now at $1,226.21. I expect the price of Gold to finally settle above the spot 100-day moving average today, giving the technical Gold traders reason to step into the market and support the price going forward.

With a tremendous number and range of headlines all over the cable business news channels, from Geopolitical headlines to continued Equity market weakness to inflation concerns, the news should attract new investors into Gold and Treasuries, as safe havens and alternatives to Equities at this time.

With the economy still operating on all cylinders, no one expects a total rotation out of Equities, but there is a growing concern from traders that the results of the midterm elections could derail anything the President has in mind to keep the economy going at the strong pace we see today.

Case in point: Investors have been pouring dollars into the gold ETFs, up 8 of the last 9 trading days, now holding over 65,500,000 ounces, the highest level since the early part of September.

Have a wonderful Friday.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals for information and thought-provoking purposes only and does not purport to predict or forecast actual results. This editorial opinion is not to be construed as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein cannot be attributable to Dillon Gage. Reasonable people may disagree about the events discussed or opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. It is not a solicitation or advice to make any exchange in commodities, securities or other financial instruments. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisers with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.