DMR–Gold continues to track sideways, some cheerful technical analysis ($1300 by year-end?)


Gold continued to track sideways this morning – down $2.50 at $1243.50. The metal was stable in Asian trading then dropped moderately on minor speculative selling on London AM fix associated with Theresa May’s surviving a Tory vote of no-confidence.  All in all, the wait-and-see, sideways pattern established earlier in the week seems to have gained the upper hand for now. Barring a major event, we could remain in a narrow range until after Wednesday’s meeting of the Federal Open Market Committee. Silver is up 2¢ on the day $14.77.

Anna Couling, who posts technical commodity analysis at, offers a hopeful note as we move toward the conclusion to 2018.  In a short analysis titled Some Christmas Cheer for Gold Bugs [LINK], she says –

“Last week’s price action was seminal, with gold breaking through strong resistance in the $1238 per ounce region. In addition, this price action was supported with excellent volume and in agreement, with the trend monitor confirming the transition to the bullish sentiment. A recovery to $1280 per ounce now seems possible and possibly to $1300 per ounce, provided this is supported with strong and rising volume on the weekly chart. And of course, further weakness in the USD may well provide additional help given the FED’s pace of rate increases which looks set to slow.”

With those words of reassurance, we will close out today’s report and wish you a pleasant rest of your day.

Quote of the Day
“Reality is far more vicious than Russian roulette. First, it delivers the fatal bullet rather infrequently, like a revolver that would have hundreds, even thousands of chambers instead of six. After a few dozen tries, one forgets about the existence of a bullet, under a numbing false sense of security. Second, unlike a well-defined precise game like Russian roulette, where the risks are visible to anyone capable of multiplying and dividing by six, one does not observe the barrel of reality. One is capable of unwittingly playing Russian roulette – and calling it by some alternative ‘low risk’ game.” ― Nassim Nicholas Taleb, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets

Chart of the Day

Chart note: Since the turn of the new century, gold consistently provided a real rate of return on investment when measured against inflation.  In fact, it provided a real rate of return in twelve of the eighteen years represented on the chart.  The period was one of subdued inflation. Gold’s performance, as a result, took many analysts and professional money managers by surprise and altered the perception among money managers that the precious metal is solely an inflation hedge.

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