14 September 2015

CelticGold Market Report 14th September 2015

Gold Technical Chart - 1 Year

Gold briefly fell below $1,100 on Friday but was able to stage a rally to close at $1,108.70. After rising almost $100 from the low of $1,071 Gold has given up most of its gains over the last month and is again close to testing critical support levels. However, it could be a good sign that Gold was able rally off the lows on Friday and close above $1,100. 

The big news on traders minds is next week’s Federal Reserve meeting which is one of the most anticipated in recent history. Regardless of the outcome of the meeting many analysts are expecting markets to be volatile. Even the bullish stock market traders are beginning to realize that the Fed is backed into a corner.

If rates are raised by just a quarter of a point it could trigger global markets to fall even further. But the Fed also knows that continuing to keep rates near zero could also trigger another crisis. So as we have said recently the markets are at a key inflection point.

Right now there are a lot of uncertainties in the markets. So over the short term the direction of Gold is unclear. Some market participants suggest that if the Fed raise rates then Gold could move lower and test the $1,070 to $1,080 level, which are the next key critical areas of support. 

However, should the Fed hold off on hiking rates then its possible that Gold could see a strong rally. As we mentioned in our last update the next key area of resistance for Gold is a weekly close above the $1,160 level. 

No matter what happens over the short term, Gold and Silver investors need to keep the big picture in focus. When the next cyclical uptrend begins in the precious metals it will last several years and this is what investors in the precious metals should position themselves for.

Below is a good article from GoldSilverWorlds that highlights the reasons to expect higher Gold prices to eventually win out.  

Link to GoldSilverWorlds article

Market Update for Silver

Silver Technical Chart - 1 Year

Silver hit a high this week of $14.92 and needs to regain the $15 level as the next key area of resistance. Just like Gold, Silver traded lower on Friday dropping to $14.32 before rallying to a close of $14.62. Over the short term, Silver and Gold will be a victim to the markets reaction to the Federal Reserve policy decision next week.  

The biggest mistake traders are making right now is treating Silver like a commodity. Because industrial demand is down in base metals due to a slowing global economy, Silver is not generating much interest by the mainstream investment community. We mentioned in an article we posted earlier in the week, the Bloomberg Commodity Index is at its lowest point since 1999. Silver is being lumped into the commodity category by investors and traders.

Silver Demand Remains Strong

However, those who understand Silver’s role as a precious metal know the incredible value Silver is at these prices. In an interview with Greg Hunter of USA Watchdog, Silver expert David Morgan said the following:

“I did a survey of many of the top wholesalers and retailers in the country and came to the conclusion that the retail side of the market has basically seized up. One of the biggest mints in the U.S. is backlogged about 4 million ounces. You have two other main government mints that are basically on halt and not producing, or trying to catch up.” Source: USAWatchdog.com 2015 September 9th) 

So, demand for Silver continues to be very strong. When referring to the cost of a miner to produce Silver, Morgan went on to say in the same interview: 

“The average mining cost used to be about $22 an ounce, but with the oil price dropping, it’s now about $15. In most cases, you are buying it for less than the best producers on the planet can produce it for”.

It is not yet clear whether prices have bottomed. But in a world with too much debt and instability in the currency and bond markets, Gold and Silver is way to own something tangible that history has aways shown to be valuable.

Author: celticgold.eu

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