CelticGold Market Report 29th March 2015
Gold had a good week ending Friday near the important $1,200 price level. Since our last update two weeks ago, Gold has demonstrated some resiliency holding the band of support levels that exist between $1140-$1150. While it is not yet clear whether Gold and Silver are entering a period of sustained higher prices, a strong case can be made that the metals have now possibly bottomed.
The news this week was mostly dominated by the geo-political conflict between Yemen and Saudi Arabia. The conflict in Yemen, the unresolved situation in Ukraine and the deteriorating relationship between Russia and the US are all adding uncertainty to the markets.
The conflict in Yemen is leading to more chaos and instability in the Middle East region. Below is a link to an article on ZeroHedge that talks about why Yemen matters.
At this point it is unlikely that Gold will see significant losses given the tense geo-political environment. The next key next key area of resistance for Gold comes in at around $1220. We’ll see if Gold can manage to inch higher and continue to show strength.
Gold and Silver Cycles
For those who have invested in Gold and Silver, one of the important factors to understand about the metals market is that it moves in cycles. Since Gold and Silver get very little positive coverage from the mainstream media, investors can get concerned when the price drops, especially if the drop is precipitous and covers an extended period of time.
However, when looking at the resource market in more depth, cycles are a big part of the Gold and Silver market. This is why we always encourage taking a long term view of the market, especially during periods where prices have been depressed.
We have posted a link to some excellent analysis of Gold and Silver cycles that was done by Casey Research. As you can see from the data, the price movements since 1975 have sometimes been dramatic. However, down markets have always been followed by an up market.
The article highlights that another bull market is likely coming soon. Although there is manipulation in the Gold and Silver market, investors in precious metals need to understand that the current down market since 2011 is a normal part of how the resource market works. The market will come roaring back at some point. When it does you’ll be glad you own the metals.The link to the article is below.
Update for the Silver Market
Silver had a strong week and its technical picture has improved a bit more than Gold. Pushing above $17 this week was a good sign for Silver. The $18 level is the next big area of resistance.
Because of the strong move Silver made this week, we wanted to again highlight some of the key fundamental factors that will eventually take prices much higher. There is a link to an article at the end of the update that provides a good overview of the key reasons to own Silver.
As we said in the Gold update, it is still unclear whether or not the next phase of the Gold and Silver uptrend is here. However, it is beginning to feel like the tide is shifting in favor of the metals again.
The reasons for owning the precious metals are getting even more compelling. The recent formation of the China led Development Bank, the inability of the Fed to raise rates, the many geo-political conflicts on the planet, the never ending easing policies of the Central banks, and the massive derivative exposure of the big banks, just to name a few.
Gold and Silver prices are headed higher, it is just a matter of when.
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