Gold shows resilience, bounces back from yesterday’s sell-off

EARLY REPORT

Gold showed some resilience this morning by bouncing back from yesterday’s sell-off with a good gain. It is up $7 as this is posted at $1345.  Silver is up 17¢ at $16.65.  Assisting the precious metals are reports that the Trump administration plans to stiffen pressure on China with new tariffs and blocking its technology exports. Then there is the lingering concern about what happens next in Syria. China has promised to react strongly to the introduction of additional duties on its U.S. exports.

Gold pushed higher despite a stronger dollar, and looks on track to complete its second straight week of gains.  That trading range we have mentioned in the past between $1305 and $1360 comes to mind in that the channel seems to be narrowing – a good sign from a technical perspective.  Geopolitical news, it seems, could give gold a strong push in either direction, but at the moment that venue has more chance of going negative (positive for the metals) than its does moving in the opposite direction.

Chart of the Day


Chart note
:  This chart is a regular feature in the EARLY REPORT and for good reason.  The long-term correlation between gold and the national debt offers one of the strongest arguments for gold as a semi-permanent aspect of the contemporary investment portfolio.  Regularly, we are reminded in press reports that, with the new tax cuts and promised spending via the latest tax legislation, the United States will run deficits for the foreseeable future over $1 trillion annually.  It will surprise a good many to know that over the course of the last 12 months, the United States added $1.275 trillion to the national debt.

 

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