Gold Price

Since late 2014, I had been thinking that the price of gold might stage a nice and tradeable counter -
trend rally over the second half of this year. There was the usual seasonal pop in early 2015 as gold
piggybacked seasonally strong action in the oil price, but the action over Half 2' 15 has lacked any
zip. Gold Price

With the global economy growing slowly and continuing evidence of excess capacity in industrial
production, key gold price indicators such as the oil price, sensitive materials prices, and the CPI
have simply not supported the traditional inflation hedge strategy for gold. Moreover, the $USD
has remained elevated and the US monetary base has continued flat. As outlined in the post just
below on stock market fundamentals, I expect some improvement in key gold price indicators such
as a higher average oil price, a rise in the CPI, and for good measure, a weaker $USD, as we
progress through to the end of 2016. Since the expectations outlined below are not at all dramatic,
gold traders will have to count on the inherent volatility of the gold $ more than they normally do
even if the projections are ball park.

The painful process of mothballing excess industrial capacity could take an extended period of time
so it will be vital to see at least a modest increase in global economic demand to generate much
trader interest in oil, commodities generally, and PMs.