About Me

Retired chief investment officer and former NYSE firm partner with 50 plus years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!

Wednesday, October 02, 2013

Gold Price

The gold price has been traveling with some old pals in recent months, namely the oil
price and the $USD (gold behaves inversely to the buck). The yellow metal did latch on to
the  seasonal rise in the price of oil this summer, and it derived benefit from the Syrian crisis
and labor unrest at the shipping point in Libya. Now, however, the US and Russia are
teaming up to remove Syria's chemical weapons and Iran's new president, Mr. Rouhani ,
is talking nice to the US in an effort to get out from underneath tough sanctions which have
hurt Iran's economy. Moreover, oil is poised for a period of seasonal weakness and with the
Syrian and Iranian threats off the table in the short run, we'll soon see if oil supply / demand
fundamentals are in tight enough alignment to mitigate a seasonal run down in the oil price
to the $85 - 90 bl. area by late Jan. of 2014. Thus the gold bulls may have to shift more
focus on to the $USD and the US debt limit fight which is just starting to roll out. Gold Chart

Gold did fail to break the downtrend in price running from Sep. 2012's $1800 level when it
recently rolled over at around the $1400 point after a strong rally in summer's months. That is
a bad sign, but since the oil price has yet to break sharply lower, gold may get to test the
downtrend line again in coming weeks. Even so, gold is drawing price action impetus from
other markets and has yet to show a supportive fundamental base in what must still be
counted as a bear market. To hold technically, gold does need to take out and rally above
the $1360 level in the weeks just ahead.

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