Gold Sideways On Light Volume

Posted: Nov 22, 2012 12:01 AM

It’s amusing to read market pundits going on about chart consolidation and technicals on days that traders have skipped out early so they can head for grandma’s house for the holidays. 

Gold is up $0.34 to $1,726.64 and silver is down $0.09 to $33.03, for a silver/gold ratio of 52.2. 

Prices are cycling all over this morning on mostly sideways trading.  Trying to chart technicals on days like today is pretty much useless and prices are high enough to discourage any last minute buying before the holidays.  I expect prices to continue sideways to slightly down until everyone is back at work next week. 

The only commodity really bucking the trend today is oil, which has been flying high all week.  Palladium is showing some positive bias while platinum and copper are trading lower. 

You might have noticed that I’ve been avoiding analysis related to the fiscal cliff negotiations that are ongoing in Congress as the subject pertains to gold and silver.  That’s mainly because the whole concept of the “fiscal cliff” is another one of those terms designed to panic people.  The truth is there is plenty of time to reach a settlement, even if the December 31 deadline passes.  There’s no need for either side to rush into a bad deal. 

The whole fiscal cliff scare was engineered by the same people trying to panic the nation over the size of the federal debt.  The gloomy predictions of the government being hobbled by the cost of debt and investors avoiding U.S. Treasuries have turned out to be complete hokum.  The treasury is selling all the bonds they can print and global investors are driving prices down to near zero on short-term bonds. 

That’s not to say we don’t need to get a grip on government spending.  We do need to curb our reliance on the national credit card and it’s going to be a painful adjustment whenever we do it.  While it’s a necessary step, we would be wise to take a lesson from Greece and Europe and avoid the equally dire consequences of poorly implemented austerity.

If you’ve been following my investment advice you carry little or no debt in your personal life, with the possible exception of low-interest rate mortgage.  You also put a fixed amount of your income in diversified, dividend-paying investments and carry between 10 and 20 percent of your wealth in hard assets like gold and silver. 

I realize that investment philosophy is not terribly exciting and it’s not new but it allows those who stick to it to live largely free of the stress caused by every whiff of economic panic. 

Chris Poindexter, Senior Writer, National Gold Group, Inc