I think that was it…the correction in gold that I called mid last week. Yes, it’s still overbought. The drop was only about $50 per ounce, top to bottom. But I think the uptrend may now resume. Because this is not a gold bear market, dear reader. It’s a bull.
The bulls were doing cartwheels after January retail sales were released. The consumer is back, they said, after a weak holiday season. Now, not so much. February retail sales were released today and the news is not good.
This Wednesday, we have another meeting of the Federal open Market Committee (FOMC) to set monetary policy for another six weeks. Please do not sit on the edge of your seat, dear reader. I can confidently tell you that nothing important is going to happen at this meeting or the press conference to follow. The market may decide to react to nothing but that is a different matter.
Central banks became net buyers of gold in 2010 and their ownership has increased every year since then. But not Canada. Canada’s official international reserves last released by the Bank of Canada (BofC) on February 23, 2016 show gold reserves at zero.
The head of the European Central Bank (ECB), Mario Draghi, promised to do ‘whatever it takes’ and today he delivered–an absolutely stunning package of monetary madness that would have been unthinkable just a few short years ago.
As we have noted many times, bull and bear markets are defined by investor psychology. There is no better indicator of investor sentiment than margin debt. When people are willing to borrow to buy stocks, they have to be bullish.
Gold is the best way to preserve wealth.. Why? Because gold cannot default.
The US Fed and all the conventional economists say the chance of a US recession is in single digits. Then why is foreign trade imploding?
Readers will recall that I called the big up move in gold in mid-January. Now, everyone’s on board. I can’t find a negative word on gold anywhere. Two months ago, you couldn’t find anything positive. How the worm turns.
Yesterday, Colorado-based Sports Authority filed for Chapter 11 in Delaware bankruptcy court. Perhaps you think this is just another case of too much retailing for a slowing economy. This would be partly true but the whole story is darker than that.