A Crisis Of...?
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We mull certain broad questions over so we can give you a carefully considered look at the big picture fundamentals in this section of our emails.
Today's market reaction to unemployment news is as frustrating and confounding as usual for gold bulls and it's neutral to negative for any shorts who may be in a trade. Even though new weekly jobless claims came in higher than expected and the previous week's claims were revised upward, gold has only been able to tread water. Last week, on news the economy had a higher number than expected new (mostly shabby) jobs, gold took a beating because absolutely, positively, "fer sure" that meant the Fed would taper in December.
It makes relatively partial observers like us begin to think that there must be some underlying reasons for the struggles gold (and silver) have faced. We mean here something different than the easy-to-understand appeal of equities, wars in far off lands that start and stop, the movement of the dollar, and so forth. Those are temporal influences that change weekly, if not daily.
We mean a crisis of some sort has developed in gold. Is it a crisis of faith? Something like that. Is it a crisis of analytical narrowness? That's another element. Is it a crisis that tells a lot of people that gold was radically overvalued earlier at 1800 or 1900 and we are going through a shakedown that brings us closer to reality? There is that, too.
It is particularly infuriating when the analysts and traders who are supposed to watch signals very carefully - buy on the rumor, sell on the fact - work in the opposite fashion. They are selling on rumors (that they themselves create) and are sort of buying on the "facts" long afterward. (We put quotation marks around the word "facts" because what they are really buying on is more thorough analyses of, say, Fed tales told out of school that usually are nothing more than sound and fury signifying nothing.)
What can we do? We can only present our most sober side and tell the truth.
From two politically disparate media voices today, we get two key questions about the Fed's future activities.
Fox Business News asks, via an interview with WSJ Chief Economics Correspondent Jon Hilsenrath, whether Janet Yellen, heir apparent to Ben Bernanke, can rein in the disparate Fed voices that seem to be burbling like an ever-flowing, overflowing brook. Those differing statements - oddly contradictory and annoyingly frequent - add uncertainty to an uncertain market. Her only solution is to issue more statements herself or work with other members of the Fed Board Of Governors who are steadier than the mavericks out in the hinterland banks.
Meanwhile, the thoughtful liberal website Think Progress is firmly in the camp that believes without QE3 we would have gone into another fairly serious recession. It's a serious consideration.
What all sides aren't asking, let alone answering, is the question that goes something like this: "If we were going to lay out $4 trillion in credit, what would have been the best way to do it?" Unfortunately, the answer to that is blowin' in the wind. The lack of fiscal policy and vision in Congress and from the President has forced the Fed to act in a responsible but far from ideal manner. Fate has handed the Fed certain cards and it must play them.
Wishing you as always good trading,
Gary S. Wagner - Executive Producer
Market Forecast
We had been looking for lower pricing in both gold and silver over the last few weeks... up until just a few days ago. On this most recent price decline, gold prices came just 10 dollars shy of the recent lows at 1250. With that in mind, once we saw price bounce off of that low, we forecasted that we most probably will see some sort of upside bounce, and that is exactly what we saw. Today's video will look at this current upside move and place current pricing into our most up-to-date Elliot wave count. We will also forecast upside targets based on Fibonacci retracement theory.
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Gary S. Wagner - Executive Producer