Gold and silver were flat yesterday as rage against the banking and financial industry spread to four continents over the weekend.
Light crude oil joined gold to move slightly higher, with gold up $3.56 to $1,684.61. Silver was mainly flat this morning, up $0.13 to $32.33.
The sideways trading came as the dollar lost ground to almost every major currency and Europe managed to talk their way through yet another “comprehensive” plan to deal with their debt crisis. It’s likely the G-20 will follow up this talk with even more serious statements later this week.
It’s good to remember that sovereign debt is not the only factor to consider when looking at Euro-zone economic stability. No amount of chatter is going to make a dent in the systemic problems underlying the Euro-zone economic crisis. Until there are better investment options, gold and silver are going to remain in safes and safe deposit boxes across Europe.
The slow-motion problem-solving in Europe, coupled with continued high demand from China and India, will provide ongoing support to gold and silver prices.
Adding to the market mood this morning were mainly peaceful protest around the globe aimed at the banking and financial sectors as the anti-Wall Street mood settles in across America and around the world. Ironically, Citigroup and Wells Fargo are both set to announce huge profits in yet another tone deaf day in the financial sector.
It could be that the government pillaging of the middle class has finally met a wall of resistance but nothing is going to change drastically or soon here, either. So, short-term, the best investment strategies would still have a significant defensive component aimed at preserving wealth and keeping at least some of your cash out of places where the buzzards on Wall Street can peck at it.
Until the big picture story changes there’s no reason to change your investment strategy. Keep making regular, small buys of physical gold and silver as part of your overall investment strategy and, when the winds of panic blow and prices go into parabolic spikes, make small sales into those rallies.
This week I expect gold and silver to trade in a narrow range, tightly correlated to changes in the dollar. Look for that trend to continue in the absence of some momentous economic news one way or the other, but right now I’m not seeing where that big news would come from.