Is it time to be bullish or bearish? CHART OF THE DAY: GOLD—A BREAKOUT OR DOUBLE TOP? Since gold futures (/GC–candlestick) broke out of its downtrend (yellow line) price continued to move higher until the 1580 level. It almost looked like it would reverse from there but instead it hesitated and then started moving back up toward 1580. It remains to be seen if price will break above this level or if it’s going to act as a resistance level again. Chart source: The thinkorswim® platform from TD Ameritrade.
I think we all need to distinguish between the short and long term here. In the short term, I imagine gyrations ranging from 1400 to 1700 are probably possible. What interests me more are the long term dynamics. From what I can see, increased central bank demand for non-dollar reserve assets, combined with an eventual reevaluation of inflation risk in the US based on skyrocketing deficits, could potentially set the stage for a significantly higher price in future. Recall that our current monetary system unanchored by gold really only dates to the 1970s; who is to say that it will be around forever?
It will go up! It will also go down! You see, if I knew the answer to your question, I'd be taking out as many call or put options as I could.
No one selling a little gold? I think if you Dollar Cost sell at this point, a little once a month would be good. At 1580 Gold is doing the best it's done in years. Grab a little profit while you can but by no means dump it all. Climb the ladder!
I predict that gold will continue to go up b/c last Nov. I sold 2 of my gold coins when gold was $1466 Had 'em both since the 1970's. But I just happened to go into a LCS that gave me a fair offer for the coins, so..... More seriously, I watch Bloomberg TV a lot, & listen to what a lot of money managers are saying (people who are usually stock or bond-centric); & more & more are suggesting gold. I think I'll keep what gold I have, unless it goes to $2500 or thereabouts. And a lot of us get attached to our collections, & some of those beautiful coins.....
But dollar cost averaging works to your disadvantage when you're selling -- it leads you to sell less when it's high, and more when it's low! I don't have a good strategy for selling more when the price is high and less when the price is low. Lots of people can dollar-cost average for buying, because most people have money coming in on a regular basis. Few of us get PMs as a weekly or monthly salary/dividend/whatever. If we did, I guess you could sell a fixed weight of PM each month, getting more dollars when the prices is high, and less when the price is low...
If things go wrong/unexpected in November, gold will shoot to $3,000 in a blink. You could have a mini-1970's move. That's all I'm saying.
No matter who wins in November, "things" will be right for ~50%, and wrong for the other ~50%. So, $3000 no matter what then?
No, you have certain policies being proposed that would send BILLIONS into gold overnight. Has nothing to do with which party or candidate wins in November per se, I am talking about fundamental changes in the economy and private property rights akin to double-digit inflation in the 1970's and the end of fixed-exchange rates in 1973.
Negative interest? If cash balances decay, that would certainly alter the expense equation for PM maintenance...
Negative interest rates are certainly a new phenomenon, but are only an existential threat to money market funds and a nuisance to banks. But wealth confiscation and confiscation of private property are 3rd World-ish. That's what made American Double Eagles a hit all over the world from the 1850's through 1930's.