Gold rallies, reverses, fades

Gold rallies, reverses, fades by Michael J Kosares for USA Gold

Gold rallied back over the $1500 mark overnight in response to the attack on an Iranian oil tanker in the Persian Gulf, then reversed as things began to look brighter both on the Brexit and trade talk fronts. Now, we await what the rest of the day might bring. . . .At present, gold is fading at  $1485 – down $9 on the day.  Silver is down 6¢ at $18.47. We find ourselves in full agreement this morning with Vandana Bharti, assistant vice-president of commodity research at SMC Comtrade. “Prices are on the downside, going away from core fundamentals and reacting to sentiments,” she told Reuters for its summation of trading in the London market overnight. “When markets move sentimentally, you can expect a wild swing in prices.” In short, with sentimentality comes volatility. (Please see our Chart of the Day.)

Quote of the Day
“When President Nixon closed the gold window at the U.S. Treasury on August 15, 1971, he told several whoppers. He said it was to ‘defend the dollar against the speculators.’ He also said the action would, ‘suspend temporarily, the convertibility of the dollar into gold.’ Furthermore, he told Americans that, ‘your dollar will be worth just as much tomorrow as it is today.’ Nixon’s actions came on the heels of 60-years of gradual steps to remove gold’s backing of the dollar. In effect, $1 today has the same buying power that $0.16 had when Nixon took these ‘temporary’ actions. Over this same period, the U.S. national debt has run up from about $398 billion to over $21 trillion, and the economy has been utterly warped.”  – M.N. Gordon, Economic Prism

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