You’ll find the price of gold moving higher again.
It’s only been two weeks since the big crash. But that hasn’t stopped the yellow metal from staging a comeback. For the first time in five weeks, gold ended trading Friday night with a weekly gain under its belt.
After a furious two-day drop that saw gold prices dive from more than $1,550 to the low $1,300s, gold has recovered to the $1,470s. Not a bad move for nine short trading days.
So that’s it? Gold has clawed back about half of what it lost during the two-day drop. It’s back. We can just forget about it and go back to our normal lives, right?
The drama is just beginning. You’ve already witnessed the unprecedented two-day drop. Now, you can add a snapback rally to the mix. I already told you to expect volatility in the coming weeks as buyers and sellers struggle to find balance after the drop. Now, things are getting interesting.
Big money is lining up to bet on lower prices — all while small investors embark on a massive buying spree.
‘Hedge funds accumulated their second-biggest bet against gold on record just as prices rallied the most in 15 months on surging demand for coins and jewelry and Goldman Sachs Group Inc. ended a recommendation to sell,’ proclaims Bloomberg.
Even with the overseas jewellery demand and a rush to buy coins closer to home, the precious metals market will have a difficult time overcoming the mainstream investor ditching his underperforming gold trading vehicles. ETFs have already flooded the market with more than $16 billion in bullion. If another round of selling takes hold, watch out…
Speculators will continue to push gold prices lower in the coming months. Hang on – it’s going to be a rough ride.
for The Daily Reckoning Australia
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