21
Nov
2016

Physical Gold Is A “Long-Term Position” as “Hedge Against Governments”

Physical gold is a “hedge against governments,” a “long-term position” and is still “on a buy signal” in the longer-term according to Dominic Frisby writing in the UK’s best selling financial publication Money Week this week.

Frisby believes in owning physical gold for the long term and that gold is close to bottoming but could go lower in the short term:

“Gold has buckets of support in the $1,200-$1,230 area. It made its March and May lows there earlier in the year. The relative strength index is below 30 – meaning it is coming into the “buy” zone. Gold stocks were up 5% yesterday while gold was stable – that is often a bullish divergence.

So it’s very possible that gold could be making an intermediate-term low in these parts. If I sold everything now and it turned around and rallied, I’d feel like a right bozo.

The fundamental reason I own gold is that it is my hedge against governments. From a political upheaval perspective, 2016 has been the year that keeps on giving. I don’t see that changing. For all the volatility, you want a considerable long-term core position.

But this whole episode has been a valuable lesson in how, once you get swayed, it is very easy to get carried away.

I’m now comfortable with my position. From a risk-management point of view, I want to have some physical gold, some cash and some stocks. I have that.

But I want to see clearer signs before I go all in again. I don’t have that. Gold and gold stocks are still on a short-term “sell” signal for me.”

Read the full article by Dominic Frisby on MoneyWeek here

News and Commentary

Gold bounces off 5-1/2-month low on physical buying (Reuters)

Dollar charges to 14-year high, bond tantrum in full swing (Reuters)

Gold edges higher as US dollar softens (Bulliondesk)

Gold price hike in Egypt leads to popularity of Chinese gold-plated ornaments (Global Times)

Indian traders buy gold to pre-empt feared curbs on overseas purchases (Business Live)

How the Italian referendum next month could surprise everyone (Moneyweek)

Italy’s banks in a slow-motion crisis. And Europe may pay – CNBC (CNBC)

The Big Short: is the next financial crisis on its way? – Guardian (The Guardian)

Is Silver Set To Surge Off Significant Support? (Zerohedge)

SocGen Sees “Sharp Rise In Gold” As India Plans Cap On Cash Holdings (Zerohedge)

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Gold Prices (LBMA AM)

21Nov: USD 1,214.95, GBP 984.72 & EUR 1,143.39 per ounce
18Nov: USD 1,206.10, GBP 971.15 & EUR 1,135.54 per ounce
17Nov: USD 1,232.00, GBP 988.19 & EUR 1,148.10 per ounce
16Nov: USD 1,225.70, GBP 984.36 & EUR 1,144.68 per ounce
15Nov: USD 1,228.90, GBP 988.65 & EUR 1,138.70 per ounce
14Nov: USD 1,222.60, GBP 978.08 & EUR 1,136.53 per ounce
11Nov: USD 1,255.65, GBP 991.96 & EUR 1,154.45 per ounce

Silver Prices (LBMA)

21Nov: USD 16.68, GBP 13.47 & EUR 15.69 per ounce
18Nov: USD 16.51, GBP 13.30 & EUR 15.54 per ounce
17Nov: USD 17.04, GBP 13.65 & EUR 15.87 per ounce
16Nov: USD 16.95, GBP 13.64 & EUR 15.85 per ounce
15Nov: USD 17.00, GBP 13.68 & EUR 15.80 per ounce
14Nov: USD 17.20, GBP 13.73 & EUR 15.95 per ounce
11Nov: USD 18.59, GBP 14.73 & EUR 17.09 per ounce


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Mark O'Byrne
Executive Director