About Me

Retired chief investment officer and former NYSE firm partner with 40 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 !!!

Saturday, January 04, 2014

Gold Price

The gold price has notched a double bottom around $1200 oz. over Half 2 '13. the bugz
are coming out of the woodwork with buy suggestions. Never mind that gold made a
triple bottom over 2012 - early 2013 before it tanked down to $1200. Gold Chart  Even so,
a double bottom will prove intriguing to technicians, and if gold can rally through down -
trend resistance at $1250 over the next couple of weeks, there could be a trade worthy rally
as gold can experience cyclical bounces even if it remains in a longer term bear market.
As discussed back on 12/12, gold had entered a low test zone with $1200 or thereabouts
the likely target. I also mentioned that it might be wise to see if gold can bounce up above
trend resistance since the failures to do so since late 2012 have been devastating to the bulls.
So, with another rally perhaps starting up, watching if gold could take out $1250 on the
way up in a decisive matter could save more angst and perhaps signal a more positive tone.

Let me end with a cautionary note for the bugz. Much is now being made of the $2.4 tril.
sitting in excess bank reserves as a result of the QE programs and the inflation potential such
may carry for the future. Yes, there could be something to this point, but keep in mind as
well  that my broad measure of private sector money / deposit growth is currently sitting
just a little more than $2 tril. under a reasonable long term trend of 6% annual growth.
The Great Recession took a huge bite out of the equation!

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