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Gold Prices Are Up: What Now ?

Commentaries & Views

(Kitco News) - I have been doing this for 45 years and can’t guarantee gold prices will go up or down. If I could I wouldn’t be writing this post. I can’t stress enough that you need to believe in your motivation for holding gold.  I believe gold plays a viable role in a balanced portfolio. If you are a trader, you may suspect the fortitude of the recent rise. After all, if the Chinese and Mexican trade disputes get resolved, the U.S. economy should continue to (based on peer performance) outperform the world and the Fed should stay on hold and US 10-year rates should rise; in this environment the metals should weaken from current levels. If gold is part of a balanced portfolio it has provided some relief in the dropping equity space. We have steadfastly remained believers of a core holding and recently have advocated a bullish stance on gold from a trading perspective. Why would anyone be short this market given the macro-events around us? But we continue to see retail selling into strength, which, as a contrary indicator, suggests -- unless issues with Mexico/China get resolved -- higher prices. I can see why traders are taking a short shot, but balanced portfolio sells don’t make sense to me. Either you are a trader or an investor. The psychologies are inherently different. As long as retail sells, I remain constructive.

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