Gold’s Wild Ride
If you’ve been paying attention to gold recently, you’re probably wondering: What the heck is going on? Over the last eight days, we’ve seen rapid losses followed by gains, only to be followed by further losses (see chart below). Currently, the price is sitting around $25 lower than it was only 12 days ago. From what I gather (from reading the thoughts & ideas of people much smarter than I), this wild ride is not yet finished and we’ll probably see further consolidation and more short-term losses in the coming weeks.
With that said, Gold is typically a long-term investment and the overall trend for gold is UP. Many suggest we should take these corrections as a time to increase positions, as these low prices may not be available for too long.
Numerous current issues are having an impact on the gold market: Gold prices are close to a 25 year high, Oil prices are lowering due to increasing inventories and the warmest winter on record; many Japanese investors are liquidating their long positions on the Tokyo exchange and the dollar is gaining strength on speculation of further Fed Rate increases (beyond the near guaranteed increase in March).
Bottom line: This wild ride is merely a “Shaking of the Branches” if you will, and the loose acorns are definitely falling. I hope this consolidation doesn’t spook you into taking any unnecessary losses. I believe the long-term trend is UP, UP, UP and will not personally allow this situation to spook me.
NOTE: This article is not to be taken as investment advice. It is merely my thoughts on the current gold market and is only being offered as food for thought…