The U.S. dollar strengthened to a high this morning or 109.547 which is a near 20 year high while WTI (West Texas Intermediate) and Brent Crude oil are both down for the day by 2.86% and 2.57% respectively. The strength of the dollar and weakness of oil has hammered gold back below $1,700 as shown in the graph below.
According to an article published on Kitco News, Suki Cooper at Standard Chartered claims further risk to the downside below $1,700 is limited because most of the downside risk has already been priced in. Cooper also expects a 50 bps rate hike to be implemented by the Federal Reserve at their next FOMC meeting this month, not 75 or 100 bps and also expects the FED to pause rate hikes in November and December.
Over at KingWorldNews, the sentiment is that gold has hit a cycle low, its bull market is still in its infancy and has bottomed to a support line. Once it crosses back above this support line, a break to the upside is expected.
When it comes to precious metals, patience is required in order to tolerate all the ups and downs. The truth is, gold is in a multi-decade bull market. Sure, there are ups and down but looking at the chart below, it's obvious gold has been on a massive tear since about year 2000. With the world being awash in debt as it is today, it should be clear to anyone where the red line on this chart is headed going forward.
Check out some of my other posts...
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Heads or Tails: Another rate hike for September?
Getting ready for the coming cold, cold winter.
Have we finally reached 'peak purchasing power'?
Dehydrating - A great way to store food for winter.
Update on my backyard ''Victory Garden'.
Getting ready for the coming food shortage.
The food shortage that doesn't have to happen!
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