Gold continues to trade in tight range, eyes trade problems and recent dollar strength

DAILY MARKET REPORT

Gold continued to trade in a tight range this morning with the price down $3 on the day at $1312. Silver is down 7¢ at $1645.

Markets, including gold, are attempting to decipher whether or not there would be any lasting effect from the breakdown in the China trade talks and recent strength in the dollar. A potential emerging country currency crisis moved front and center late last week when Argentina announced raising interest rates to 40% to stem the flow of capital out of the country. Some analysts blame gold’s range-bound price behavior on short-covering in the dollar – a trend driving the dollar up and gold down.

Quote of the Day
“You have to choose (as a voter) between trusting to the natural stability of gold and the natural stability and intelligence of the government. And with due respect to these gentlemen, I advise you, as long as the capitalist system lasts, to vote for gold.” – George Bernard Shaw (1856–1950)

Chart of the Day

Chart note: We do beg the forgiveness of those who have seen this chart before, but we think it worth re-posting on a regular basis to demonstrate gold’s strong performance as a portfolio holding over a long period of time – especially for newcomers. It also fits well with today’s Quote of the Day. It shows the average annual price of gold since 1970. It is meant to dispel the notion that gold is somehow volatile or unpredictable and as a result unreliable as a long-term portfolio safe haven. To the contrary, it shows gold living up to its reputation as precisely the opposite – stable in the face of rapidly changing economic circumstances, predictable in that it reacts directly to those circumstances and reliable in that it performs as advertised when held quietly in well-protected corner of the investment portfolio.

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