Gold accelerated higher today finishing up $6.91 at $1262.08. Silver also climbed higher up 16¢ and back over the $16 level at $16.12. Over the past several months, the waterfall drops have been balanced with rocket ship recoveries – the action over the past few days being another example of the rocket ride half of the equation.
One impetus for gold’s good showing today is something that was largely overlooked. In an article headlined “Japan Tiptoes out of Radical Experiment in Monetary Policy,” the Wall Street Journal reported this morning that “Japan’s central bank has been the world’s poster child for radical monetary easing. Next year, its stance is poised to change.” The Bank of Japan, says the Journal, “is likely to raise one or more of its key interest-rate targets in 2018.” Such a move would likely boost the yen against the dollar, something that might be enough to tip the scales in gold’s favor if becomes a mainstay in 2018. Over the past several months, gold and the yen have demonstrated a strong trading correlation often rising and falling in tandem.
Quote of the Day
“. . .[T]he decay of capitalism and free markets should raise concerns for anyone’s market thesis, bullish, bearish or agnostic. What stops a central bank from manipulating asset prices? When do they cross a line from marginal manipulation to absolute price control? Unfortunately, there are no concrete answers to these questions, but there are clues.
Global central banks’ post-financial crisis monetary policies have collectively been more aggressive than anything witnessed in modern financial history. Over the last ten years, the six largest central banks have printed unprecedented amounts of money to purchase approximately $14 trillion of financial assets. . . Before the financial crisis of 2008, the only central bank printing money of any consequence was the Peoples Bank of China (PBoC).” – Michael Lebowitz, Real Investment Advice
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