Time to Buy Gold? By Erik Gebhard of www.altavest.com – Right now we’re looking at the August gold contract, as most traders have rolled out of June, as the “First Notice Day” for June futures is Friday (meaning all long contracts need to be offset or else they will enter the delivery process). Measuring from the low on 12/31/13 near $1187 to the March 17 high of $1392, a 61.8% Fibonacci retracement level targeted a pullback to the $1264 area. Prices have declined through that target area, and have slid through the $1250 area and into the $1240 range. As equities have soared to new highs, U.S. Treasury securities have also found strong demand, pressing yields lower to levels not seen since last year. Historically, it is not often the case when broad-based equity indexes and debt instrument prices move so firmly upwards with such positive correlation. We expect that within this low volatility, quiet volume, and narrow breadth equity environment, this dynamic will soon revert back to a historical norm, with equity prices more likely to track alongside debt yields, not debt price.
Issuu converts static files into: digital portfolios, online yearbooks, online catalogs, digital photo albums and more. Sign up and create your flipbook.