-- Published: Wednesday, 17 September 2014 | Print | Disqus
By Michael J. Kosares
Some of you might be wondering what happened to gold at the 4pm (MDT) open, particularly in light of the rather benign, steady-as-she-goes Fed announcement. This looks like it might have to do with the Scotland independence vote in the UK tomorrow. [One man's opinion] A late poll has the vote closing to 51% (No) – 49% (Yes). In other words a complete toss-up with the Yes vote gaining momentum going into tomorrow’s proceedings.
The pound is tanking (see chart), so is the euro and Swissie. There has to be market concern about others in Europe perhaps getting ideas. Mainstream media are focused on Catalan, Norther Italy, etc, but the real concern on the continent might be Greece, Italy, even France and the United Kingdom (the Tories appear dominant if Scotland breaks away and there is a clear movement within that party toward putting UK’s European Union attachment to a vote).
As a result the dollar’s on a crazy ride pushing gold south – with algos doing most of the damage. In my view this is all very temporary as far as gold goes. The monetary and financial market risks for all, including the United States, look much like the dump after the 2008 meltdown. That was temporary with respect to the gold price if you will recall (and an incredible buying opportunity).
There will be much discussion on all this starting tomorrow. . . . . . . . .Though the dollar looks to be an early beneficiary, in the long run the ensuing turmoil in financial markets is likely to cause a flurry of gold buying, particularly in Europe, once the smoke clears. There is much more to the vote in Scotland than meets the eye and the real dangers are within the cross-global financial institutions, just as they were in 2008. MK
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-- Published: Wednesday, 17 September 2014 | E-Mail | Print | Source: GoldSeek.com