Gold encounters resistance at $1800, reverses to the downside
‘Investors can accumulate at prices that will appear very good in a few years’ – Adrian Day
(USAGOLD – 10/15/2021) – Gold pushed lower in early trading after encountering resistance at the $1800 level yesterday. It is down $17.50 at $1780. Silver is down 29¢ at $23.30. Despite this morning’s downside, both metals are on track to close out the week in positive territory. Gold is up 1.25% on the week. Silver is up 2.75%. Long-time market analyst, Adrian Day, points out that gold has a history of tracking to the downside on the threat of Federal Reserve tightening, then rallying when the policy is actually implemented.
“Gold acts this way because all too often when the Fed does actually start to act, it is too little too late,” he writes in a detailed analysis posted at Gold-Eagle. “The Fed started raising rates in August 2005, and again in December 2015, after months of discussion. In both cases, gold bottomed the same month rates started being hiked. … The recent action has been frustratingly modest and volatile. However, the longer gold meanders in its current trading range, the faster and stronger the eventual move will be. In the meantime, gold investors can accumulate at prices that will appear very good in a few years’ time. They should not wait too long.”
Chart of the Day
Chart courtesy of Merk Investments • • • Click to enlarge
Chart note: This overlay chart shows intriguing similarities between gold’s bull market advance in the early 2000s and the current price trend begun in 2016.