Gold, silver and mining stocks didn’t do much on Friday, so what we wrote in Friday’s alert is generally up-to-date.
In short: In our opinion, no positions are currently justified from the risk/reward perspective.
The U.S. dollar remains mixed against major currencies after Federal Reserve Chair Janet Yellen signaled that recent soft economic data haven’t swayed the central bank from a strategy of trimming its monthly bond purchases by $10 billion at each of its policy meetings this year.
On Friday, crude oil gained 2.27% as the U.S. dollar weakened against major currencies after a monthly U.S. employment report came in weaker than expected.
In the past years, the Federal Reserve dropped many inflationary bombs on the markets.
In short: Opening a speculative short position (half of the regular position) in gold, silver and mining stocks might be a good idea right now.
After the announced “tapering” all the doubts were centered around the question, how big the “tapering” is
In our previous article on gold, we examined the situation in the U.S. dollar and the euro as many times in the past they gave us important clues about future precious metals’ moves.
In the last Market Overviews (and also to a considerable extent in the last several Premium Updates) we have discussed in detail differences between tapering and tightening.
In our Dec. 20 commentary, we discussed the outlook for the USD Index, Euro Index, and how these currencies were likely to impact gold.