Prices for gold and silver started the day moderately higher as the dollar lost ground to the euro.
Gold was up $3.24 to $1,731.10 and silver up $0.08 to $33.52 for a silver/gold ratio of 51.6.
Commodities in general are split this morning with platinum and crude oil joining gold and silver higher, while copper and palladium are trading lower. There’s a lot of sideways movement in the markets this morning, with several commodities flipping between positive and negative every time the screen refreshes.
Right now we’re in a holding pattern until we get a better idea of the amount and type of stimulus the Federal Reserve is planning. The European Central Bank has already committed to a program of basically unlimited bond buying so that leaves the next move up to the Fed.
This is a tough spot in the market as it appears the upward trajectory has slowed somewhat. There just doesn’t seem to be enough retail demand from Asia and not enough panic in the global markets to push prices into a parabolic upward arc.
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It’s not a bad place if you need to convert some of your metals to cash, particularly if you’re using the money to buy durable goods or real estate. I would not be selling just to lock in profits in cash.
Real estate is probably the only place I’d be putting money right now, but expect that to be dead money for quite some time. Sure, home prices are trending higher, but they’re coming back from pitch black so anything looks brighter.
Equities seem expensive right now and all it would take is a whiff of bad news to push the markets lower. I’m going to wait out September before sinking any money into the markets as I can’t shake the feeling there’s a 300 point drop waiting out there.
For retail investors holding physical gold, this would not be a good time to be stocking up. You may throw that back at me if gold tops $2,000 an ounce, but that’s the way I see it right now. If you really want to play gold in this market, I’d consider buying into a bullion-backed ETF. That way you can set a stop loss to limit the damage if the Fed doesn’t come through and prices correct lower.
The mechanics of trading physical gold make it difficult to day trade.