Advertise | Bookmark | Contact Us | E-Mail List |  | Update Page | 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page >> News >> Story  Disclaimer 
Latest Headlines

Gold Seeker Closing Report: Gold Holds Steady While Stocks Drop 2% More
By: Chris Mullen, Gold Seeker Report

Another Great Oxymoron: "LBMA Transparency"
By: Craig Hemke

Ira Epstein's Metals Video 11 20 2018
By: Ira Epstein

Trigger Time For Gold Stocks
By: Stewart Thomson

Chilton says CFTC found much evidence of silver rigging; Schiff calls rigging 'rumor'
By: Chris Powell

By: Gary Christenson

Powell and Gold between Inflation and Global Slowdown
By: Arkadiusz Sieron

Freezing Temperatures Could Heat Up Natural Gas Prices
By: Frank Holmes

Stocks are Now in ‘Complete Bitcoin Territory,’ Asset Manager Says
By: GoldCore

Asian Metals Market Update: Nov 20 2018
By: Chintan Karnani, Insignia Consultants


GoldSeek Web

On paper gold has never looked better...

 -- Published: Wednesday, 6 September 2017 | Print  | Disqus 

A faltering economy, creeping inflation and ongoing geopolitical issues are feeding a resurgence in demand for the yellow metal - and best of all it has cracked a critical six year chart resistance levels. If gold is really "the sum of all fears" then the gold price is saying that not all is rosey in the garden - best of all gold seems to have momentum behind it too. 


Year-to-date the US dollar index is off 10.3% and conversely gold in dollar terms is up 16.7% (or 10% for UK investors) and the market is eyeing the 12 month high of $1345 and the 2016 high of $1375 as the next targets. What could possibly go wrong ?


Well the problem is that word "paper" again.


Not all buying is equal - some is sticky and other types are flighty ... and it is the flakey end of the market that has driven the market higher, not the physical markets. Mints, refiners and brokers around the world report the same thing ... physical demand is weak. Meanwhile we have seen unprecedented buying on the futures markets - and it is an open question whether these typically short-termist buyers will stay the course, or succumb to the temptation to take profit.


Currently those shorting gold on the futures markets are near a five year low and the net long position has grown by a very significant 615 tonnes of "paper" gold in just 2 months. Not yet a record high but getting there. This paper buying is getting on for double what we expect central banks to buy this year. Meanwhile Indian and Chinese imports are at about 20% below the recent run rate. In short, there is a lot of speculation in the price just now.


The natural response is the price reflects reality and is justified, especially with "World War 3" a distinct possibility in some peoples view.


So what's my point? Well it is that gold has got ahead of itself and rallies cannot be sustained without support from the 'real' market. Currently gold is behaving in its default mode which is to say price elastic - high prices are seen by real investors as something to be sold into and they buy the dips. That is until they flip their view of the outlook. 


What is needed to reverse that attitude (something that happened to gold between 2000 and 2011) and for physical investors to buy (not sell) into price strength is "an event" - probably the sort of thing that not even gold bugs would not wish for.


At the moment "an event" remains a possibility, but fear is rarely sustained for long. We get inured to it. Gold has sustained excellent momentum so far in 2017 but unless the real market is taken with it, then expect this years excellent gains to be a little blunted. In other words, 2017 becomes an exact re-run of 2016, but at a 10% higher price level.  


Ross Norman


Sharps Pixley, London


| Digg This Article
 -- Published: Wednesday, 6 September 2017 | E-Mail  | Print  | Source:

comments powered by Disqus


Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to >> Story

E-mail Page  | Print  | Disclaimer 

© 1995 - 2018 Supports

©, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer

The views contained here may not represent the views of, its affiliates or advertisers. makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of, is strictly prohibited. In no event shall or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.