A Weaker Dollar Not Likely to Make Gold an Attractive Asset in a Rising Interest Rate Environment
Article Excerpt: “Last week’s price action highlights one of the major problems with gold this year: the lack of volatility. Several times this year, gold speculators had a chance to take prices substantially higher with event-driven rallies, but each time, the rallies failed.
There are still a host of issues that could move gold higher like the Brexit negotiations, issues with the Trump administration, cyber-attacks and the tensions between the U.S. and North Korea. However, last week’s price action suggests that gold is going to have a hard time rallying in reaction to any of these events if global interest rates continue to rise.”
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One of the most consistent mistakes a significant minority of inexperienced investors make is being drawn to a type of common stock known as penny stocks. At first glance, the reasons for this (ultimately dangerous) appeal are legion but almost always come down to the fact that penny stocks appear to fluctuate tremendously in price, which, they convince themselves, should lead to an opportunity to generate a very high return quickly.
Unfortunately, as with all things in life, the truth is not quite so simple. In fact, it often turns out to be precisely the opposite as penny stocks can wipe out your savings in the blink of an eye… Read Full Article
A Hawkish Fed Tone Could Take Nugget From Gold Price
An unexpectedly hawkish Federal Reserve could put significant pressure on the price of gold and push the metal to $1200 a troy ounce, some analysts say.
Metal investors have all but priced in expectations that the Federal Open Market Committee will increase interest rates when it concludes its meeting Wednesday, helping send the gold price down 1.65% since last Tuesday.
On Wednesday, weaker-than-expected U.S. economic data decreased the chance of the Fed being more hawkish than expected, which helped send the gold price up by 0.87% to $1,276 a troy ounce in London trading. But any sign of unanticipated hawkishness and gold could take a big knock, some analysts say… Read Full Article
Provided by Michael Taylor of the Houston Chronicle:
A significant portion of the Financial Infotainment Industrial Complex dedicates itself to selling you gold, as an investment.
I’m here to tell you: Resist.
I have already written about the three other horsemen of your personal financial apocalypse: variable annuities, time shares and bitcoin.
The commonality of these four horsemen is that they are sold to credible people as “investments” when they are really the opposite of investments. All four act as a drain on your net worth.
Gold fails the fundamental test of what constitutes an actual investment…
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Gold and other precious metals are often seen as an alternative investment class, with similar standing to shares and property. It may be another asset, but I think it’s one of the worst for long-term growth.
Albert Einstein once described compound interest as the eighth wonder of the world, he who understands it earns it, he who doesn’t pays it. It’s a fantastic quote and it’s the reason why shares are the best to own in the long-term.
The key thing to remember with compound interest is that the asset produces profit and that profit can be reinvested into producing more profit.
Gold is a beautiful material, it has attracted people throughout the centuries. However, ultimately, it is just a shiny material. It doesn’t generate any profit, dividends or rent. It can’t compound if it can’t generate any money… Read Full Article
“How to make a million? Start with $2 million – and invest in gold stocks!” – The Maxims of Wall Street (revised for gold bugs).
What is by far the most dangerous and high-risk sector of the market? Gold stocks!
Recently, I spoke at a gold bug convention, and after my talk, I was surrounded by several doctors, lawyers and other professionals who confessed that they had lost 70% of their portfolios.
“How is that possible?” I asked. “The stock market is at an all-time high!”
“We listened to the doom-and-gloom talks from speakers at this conference five years ago,” they admitted. “We sold out of the stock market and bought mining companies promoted here at this conference.” … Read Full Article
Investors are fleeing to gold in a desperate attempt to weather the recent market volatility… but is this long time “safe-haven” actually poised to collapse wiping out trillions of dollars of wealth in the process?
One highly respected Harvard economist is stating an emphatic “yes!”.
“While many economists will argue that gold is not in a bubble… and insist it will soar to $2,000, $5,000 and even $10,000, my research has said otherwise” says Harvard economist Harry Dent in his latest report. “I’ve never been more certain of anything in over 30 years of economic forecasting.” Read Full Article
GOLD prices have plunged in recent weeks as fears of a Donald Trump or Brexit market shock continue to fade.
The precious metal is considered a safe haven, where investors put cash in times of high uncertainty and turmoil.
But market concerns over Britain’s exit from the European Union (EU) and the new US president have calmed since last year.
As a result, gold prices have fallen to $1,226, from jumps above $1,300 last summer and in November.
Experts say rising US interest rates and a strong American dollar are set to push gold value down further in the coming months… Read Full Article
Behavioral finance points to $1,050 gold price
Frankfurt-based Sentix, a leader in the emerging field of behavioral finance, has been compiling sentiment indices since 2001 by surveying more than 4,500 institutional and private investors.
The latest reading of the Sentix index of economic expectations spells trouble for the gold price.
Capital Economics, a London-based researcher, in a research note points to this graph to provide support for its prediction that the gold price would be trading at $1,050 an ounce by the end of the year… Read Full Article