The Nuances Of A Gold Price Sale

For thousands of years, alchemists have dreamed of creating gold out of thin air. Arguably, today’s alchemists are gold analysts obsessed with calling “market tops and bottoms”. 

The relentless search for this holy market grail doesn’t build retained gold market wealth. That’s because gold is simply an asset that is either on sale or not sale. 

It is on sale now.

Shoppers in a grocery store have no interest in market tops or bottoms for tomatoes. All they want to know is if tomatoes are on sale or not. Investors need to approach gold the same way.  

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From the $1380 high to the recent $1240 area low, gold has given investors a $140/ounce price sale.

Technical indicators are oversold, and when that happens in July or December, gold can stage enormous rallies that build sustained wealth for enthusiastic gold market shoppers.

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Unfortunately, the Chinese yuan and the Indian rupee have tumbled against the dollar. 

Most of the world’s gold demand comes from China and India, and the price sale that investors see there isn’t as big as it is in dollars.

While it appears to be basing now, the yuan (renminbi) peaked against the dollar in February at Chinese New Year and so did gold.   

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The rupee has also declined against the dollar in 2018.

The bottom line is that there is a fabulous gold price sale for dollar-oriented investors, a modest one for yuan-oriented investors, and a very tiny one for rupee-oriented investors.

The good news is that most big bank and FOREX analysts agree that the US dollar is in a long-term decline. That’s positive for gold.

A decline in the euro against the dollar can spur gold buying from Europeans. In crisis situations that buying can become large enough to drive the global gold price higher.

Trump’s second round of corporate tax cuts will likely only cut the rate from 21% to 20%. That’s very modest US economic stimulus compared to the first cut. That’s more good news for gold.

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