LOG L Is For Liquidity, O Is For Oil, G Is For Gold | The Gold Forecast

LOG L Is For Liquidity, O Is For Oil, G Is For Gold

July 7, 2015 - 5:18pm

 by Gary Wagner

Gary S. Wagner - Executive Producer

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Gold Forecast: Proper Action

We went long @ 1164 we were stopped out @ 1154 (-$10.00)

We are currently flat with no open positions in gold or silver


Trending Markets - Proper Action 

On June 23 we sent out a special trade alert recommending initiating short positions in the euro. The euro was trading approximately at 111.75 at the time of the sell.

Maintain current short euro @111.65. Maintain Stop @ 112.20

For those that are long U.S. dollars we recommend maintaining current long position and maintain stop @ approximately 95.11

Gold Market Forecast

Whether we want to cite a dramatically higher dollar, or oil prices, gold and silver continues to react in a very untraditional way. As far as oil prices go, we saw that market plunge roughly 3% lower before recovering to positive ground by the close of markets today. So I am hard pressed to believe that dramatically lower oil prices had a lot to do with gold dropping like a rock today.

As far as the US dollar is concerned, yes it had an impact on gold prices today, accounting for $5.40 of a negative gold price due to a strong dollar. However, more noteworthy is the fact that normal trading accounted for the other two thirds of today’s dramatic selloff at $9.40. When we put the dollar's net change on gold into perspective we cannot make a case that this most recent selloff was solely dollar driven.

Lastly, when we look at the current crisis in Greece, and the referendum on Sunday clearly signaling that the Greek government will not accept the current austerity proposals, we can see a real disconnect between gold prices and safe haven buying.

When you add all the facts up they don’t really compute. Therefore, there has to be another causal effect that we are simply not accounting for. With this dramatic decline to the lows in gold and silver prices the real question remains whether this market can recoup, or are we headed towards dramatically lower pricing

Trending Markets: Proper Action

On June 23 we sent out a special trade alert recommending initiating short positions in the euro. The euro was trading approximately at 111.75 at the time of the sell.

Maintain current short euro @111.65. Maintain Stop @ 112.20

For those that are long U.S. dollars we recommend maintaining current long position and maintain stop @ approximately 95.11

Trending Markets Forecast

Unlike gold and silver prices, which have been reacting in a non-conforming manner, today we saw a continuation of a stronger dollar and continuation of a weaker euro. This is more in line with the current fundamentals at play.

Although the scenario in Greece changes day by day as new proposals are drawn up and presented to the EU, how reactions to each new scenario play out is anyone’s guess. However, I do believe that the lack of real progress increases the probability that Greece will exit the European monetary system.

 

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