Gold has made significant growth from daily demand in the past weeks but failed to take out the previous weekly lower high. Although price broke out of the weekly descending trendline price remains to be in a bearish space with a new weekly lower high forming this week.
We expect price to head to 1700 for recall, this is as far as we can speculate on a technical basis.
One of our analysts research shows the following from information derived from online articles.
Seven Reasons why Gold won’t go up….
1. Jewelry sales fell significantly during the Pandemic - there is no guarantee that they will return to pre Covid levels. Even if they do this may take 2-5 years or until the world is fully vaccinated.
2. Gold is losing its sheen as an asset - crypto now competes with gold for investors. Crypto is here to stay and a favorite among millennials. Gold is now seen as “old man investment” (think Peter Schiff) with more exciting
and speculative places to put your money according to the next generation - this generation change can’t be undone.
3. Inflation proves transitory and Investors realize that better returns lie elsewhere as Real Yield improve. Even if you think inflation is going to stick, TIPS still remain a better bet
4. Unlike real estate, oil, or shares of corporations, gold has very little fundamental value upon which to base a realistic price. The future price of Gold remains uncertain (apart from people in this article saying it is going to
go up) For this reason alone should always limit your portfolio holdings of Gold.
5. Once Fed starts to talk tapering and yields return upwards than the Gold Party is over.
6. Buying gold is a defensive measure: a guard against inflation, currency devaluation, the failure of less tangible assets, and other woes. We are coming out the other side of a Pandemic with major investments in
infrastructure around the globe to drive economies and growth. Wouldn’t you rather put your hard earned money in construction companies that are going to grow and even pay a dividend yield?
7. Gold tends to rise in periods of uncertainty - which is why it rose during 2019 and parts of 2020. While we still have a major global issue on our hands to deal with Covid and get the planet vaccinated, the level of
uncertainty about the future has significantly reduced. This makes investing in other assets around the globe less risky and better choices than Gold.
Overall the demand for Gold to reduce risk and guard against inflation is waning. I only see one factor that will drive Gold higher in the near term and that is a weaker USD. However, we have to wait to see how the Fed plays out its taper talks before we know the answer to that one....
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We expect price to head to 1700 for recall, this is as far as we can speculate on a technical basis.
One of our analysts research shows the following from information derived from online articles.
Seven Reasons why Gold won’t go up….
1. Jewelry sales fell significantly during the Pandemic - there is no guarantee that they will return to pre Covid levels. Even if they do this may take 2-5 years or until the world is fully vaccinated.
2. Gold is losing its sheen as an asset - crypto now competes with gold for investors. Crypto is here to stay and a favorite among millennials. Gold is now seen as “old man investment” (think Peter Schiff) with more exciting
and speculative places to put your money according to the next generation - this generation change can’t be undone.
3. Inflation proves transitory and Investors realize that better returns lie elsewhere as Real Yield improve. Even if you think inflation is going to stick, TIPS still remain a better bet
4. Unlike real estate, oil, or shares of corporations, gold has very little fundamental value upon which to base a realistic price. The future price of Gold remains uncertain (apart from people in this article saying it is going to
go up) For this reason alone should always limit your portfolio holdings of Gold.
5. Once Fed starts to talk tapering and yields return upwards than the Gold Party is over.
6. Buying gold is a defensive measure: a guard against inflation, currency devaluation, the failure of less tangible assets, and other woes. We are coming out the other side of a Pandemic with major investments in
infrastructure around the globe to drive economies and growth. Wouldn’t you rather put your hard earned money in construction companies that are going to grow and even pay a dividend yield?
7. Gold tends to rise in periods of uncertainty - which is why it rose during 2019 and parts of 2020. While we still have a major global issue on our hands to deal with Covid and get the planet vaccinated, the level of
uncertainty about the future has significantly reduced. This makes investing in other assets around the globe less risky and better choices than Gold.
Overall the demand for Gold to reduce risk and guard against inflation is waning. I only see one factor that will drive Gold higher in the near term and that is a weaker USD. However, we have to wait to see how the Fed plays out its taper talks before we know the answer to that one....
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