Gold prices buckle under the mighty dollar

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https://www.rt.com/business/368142-gold-hit-low-strong-dollar/

Gold prices have fallen to a nine-and-a-half month low as the US dollar continues to rally to its strongest level against major currencies in nearly 14 years.

Spot gold was down 0.4 percent at $1,178 per ounce by 6:04am GMT. US gold futures dropped 1.4 percent to $1,172, after touching its lowest point since the beginning of February at $1,170 per ounce.

Lifted by American bond yields, the dollar rose to an eight-month high against the yen.

“The dollar has been really strong this morning and is pushing high. The Shanghai arbitrage is trading a $25 dollar premium, which seems to be suggesting that there is selling from Asia rather than buying,”said an investment bank trader commenting on the dollar run, as quoted by Reuters.

The precious metal crashed in November due to investor concerns over President-elect Donald Trump’s promises to boost infrastructure spending and revive the economy.

The move pushed US equities to record highs. The prospect of tightening monetary policy by the US Federal Reserve is also strengthening the US currency.

“After Trump won the presidential election, the market sentiment has been changing dramatically. Gold is being pushed down by the stronger dollar and an interest rate rise. Investors are looking to buy more risky assets rather than gold as a safe haven,”said Tetsu Emori, president of Emori Capital Management as quoted by Bloomberg.

The 10-year Treasury yield gained about 3 basis points to 2.382 percent from the previous close on Wednesday.

———-

slight uptick the last few days but its in a trend down..whats the bottom?

i will be jumping back in around that figure..

“The precious metal crashed in November due to investor concerns over President-elect Donald Trump’s promises to boost infrastructure spending and revive the economy.”

it “crashed” because the markets rallied..

401

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~ by seeker401 on November 29, 2016.

19 Responses to “Gold prices buckle under the mighty dollar”

  1. Economic details are not even near my forte. I had heard that countries are attaching to the US dollar because their economies are so bad and their own currencies so weak this keeps driving up the value of the US dollar. Yet the US dollar historically speaking is very weak. What is happening in India is a move to ‘try’ to correct this.

  2. The markets rallied with the expectation that Trump will revive the Main Street economy & thus sales, which would go a long way to repairing the fundamentals of the Wall Street market.
    But the debt racked up by the federal government & Wall Street corporations, to keep Wall Street afloat, is still there. and it will take time to renegotiate international trade deals to stem America’s gushing trade wound of over 30 billion a month in trade deficits. And Trump is not even in office yet.
    Not to mention the resistance Trump will face from a congress filled with globalist-bribed oligarch puppets.
    Gold has dropped due to investors dumping it to put their cash into stock, as we’ve seen from the worldwide rallies, but I hope those investors understand this is a long-term investment…we’ve allowed them to screw up our markets and demolish the Main Street economy to such a radical degree that the mess can’t be cleaned up overnight.
    Things will get rocky, and we can only hope they stay moving in generally the right direction, but we’re ALL going to have to get in on this, we ALL have to keep the pressure on congress and support Trump’s policies.

    • According to the economics of what you are saying, people are investing (stock market) due to the risked projection (nothing wrong with risk in economics) that their investments in Main Street will be profitable? These investments in Main Street are through Wall Street?

      Wall Street has been on a general incline for years. I remember when it was around 9,000 about 20-25 years ago. Why did people run to gold when the stock market has been on a general incline for so long?

    • “the expectation that Trump will revive the Main Street economy & thus sales”

      no, the “trump call” is an expectation of inflation based on trump’s promises to spend on infrastructure. everyone knows he’s not really going to reduce war spending. at the same time, pressure to raise rates is kicking in, so borrowing will be even more expensive. and borrowing will be required to pay for infrastructure.

      this is why carl ichan left the trump celebration on election night when he saw the market go down 5%. he went home and went long to the tune of a billion dollars and made a year’s worth of gains the next day.

      investors are dumping gold in anticipation of rising rates. you dont get a return sitting on gold.

      in 1979 the US was a creditor nation. then it elected a man who promised to make america great again. he went on a spending spree that was unmatched in history, resulting in the country becoming a debtor.

      he also created the trade deficit which only got larger after he left office.

      • thanks, xxx.

      • Trump says he will borrow (because he has to in order to pay for infrastructure). So as long as he builds infrastructure (borrows) when rates rise (pressure to do so), then holding gold does not provide a return (profit).

        Trump borrowing directly raises stock prices.

        When Trump borrows (expectation or actual) this makes the stock market rise because people are dumping gold in order to get a profit in the stock market because the stock market rises when there is a lot of borrowing (which Trump says he will do).

        all the above correct?

        • when the US government borrows, it borrows money that the federal reserve creates out of thin air. that new money has to go somewhere, and it usually ends up in the stock market (see QE2, QE2, etc).

          it *seems* inflationary. but in fact hey are throwing money into a huge deflationary spiral, imho.

          • When the money goes into the stock market, then gold is not profitable? Or simply because more money printed = gold is valued less.

            That seems counter-intuitive about the money being deflationary, but there are other things in the world that seem counter-intuitive and yet are truthful. How is it deflationary? I am only able to understand how more money would mean inflation.

            Thanks xxx. I am grasping what you are saying I think.

            • 2008 created a $60trillion dollar hole that they have tried to fill with $20trillion of ‘easing’ (aka borrowing). They can’t keep throwing money into the pit because evetually (soon) the money isn’t going to be ‘free’ (i.e. low interest) and it will be instead ‘expensive’ (i.e. interest rates must go up).

              contrary to belief, the fed doesnt set the rates. the market does:

              and right now the market is pushing rates higher, thus making borrowing more expensive.

              gold doesn’t pay dividends (like some stocks) or interest (like bonds). if you have free or cheap money, you can park it in something that provides returns, or you can buy gold and hope the price goes up. the market usually prefers the returns.

              btw, i’m in the minority being a deflationist. all of this is imho.

            • xxx, “2008 created a $60trillion dollar hole that they have tried to fill with $20trillion of ‘easing’ (aka borrowing). They can’t keep throwing money into the pit because evetually (soon) the money isn’t going to be ‘free’ (i.e. low interest) and it will be instead ‘expensive’ (i.e. interest rates must go up).”

              It would cost more to fill the hole (because it is expensive) thereby taking away from what? If the borrowing was ‘free’, but instead the borrowing turns into being ‘not free’ how is the ‘not free’ borrowing paid for? Does this mean print more money in order to pay for the extra cost of the borrowing (cause it is more expensive)?

              • “Does this mean print more money in order to pay for the extra cost of the borrowing?”

                yes, keeping in mind that ‘printing’ is actually more borrowing. hence:

                • oh! Thanks!

                  When you say deflation, instead of inflation, would this have anything to do with the USD being the global currency peg? It seems there would be inflation with more money, but since the USD value increases and other currencies are forced down in value that is the deflation?

                  • the dollar going up (and up) is a sign of deflation, even if it is not (yet) reflected as price drops on store shelves.

                    there’s a difference between monetary deflation (a lack of dollars buying things in the market) and price deflation (actual store shelves with lower prices).

                    • So when you said the increased borrowing is deflationary, you were referring to monetary deflation. The money is going into the stock market, but not buying things on Main Street. You said “buying things in the market”. By “market” here do you mean “Main Street”. Meaning USD is staying out of Main Street thereby no inflation on Main Street. There is no inflation in Wall Street either according to what you are saying as well because the USD’s value is increasing and is deflationary in Wall Street. ?

  3. Reblogged this on World Peace Forum.

  4. Time to pick up some gold ..

    Caught On Tape: Man Steals $1.6 Million Bucket Full Of Gold In Midtown Manhattan In Broad Daylight

    http://www.zerohedge.com/news/2016-11-30/caught-tape-man-steals-16-million-bucket-full-gold-midtown-manhattan-broad-daylight

  5. All you say is true, however…
    The stock market is living off borrowed money & has been for a decade or so…and there is a limit to how much even a nation can borrow.
    For gains to be real, the businesses that make up the market must have consumers to sell to, and must be producing something to sell. Markets must be created through the introduction of new products, and markets must be expanded into new territory. Everything sold must eventually wear out, and thus must be replaced.
    But if you have no consumers, your only buyers are governments, that go deeper into debt each year trying to maintain some level of economic activity. And corporations borrow to float their stocks, as well.

    And as I said, there are limits to how much can be borrowed, and those limits are reached when the borrower has gone so far into debt that they cannot even service the interest any longer.

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