The gold price trend is the direction in which the overall market is moving. A bullish gold price trend is characterized by higher highs and higher lows. A bearish gold price trend is one in which there are lower highs and lower lows. With a gold price trend that is bullish, investors expect higher prices in the future and purchase gold on the hope that they will profit from this increase.
Gold prices rising for 10 years straight…the money supply greatly expanded…the printing press for dollars running overtime…am I the only one concerned about rapid inflation? I rarely read or hear a report talking about today’s rising prices or the hyperinflation we may sustain in the years ahead. We all know prices are rising—only housing prices have remained low. Inflation is real and it is here now.
So, with investment risk high and economic data showing lackluster numbers, all the market has to trade on over the near term are corporate earnings and visibility. If what companies report doesn’t make the grade, then we should be in for more downside in stocks. Things are the way they are because of a lack of austerity, both at the individual and country level. The fact of the matter is that austerity hurts, but it’s exactly what’s required over the next few years to get things back on an even keel. What goes around comes around. For far too long, governments have been borrowing on the future of their own citizens in order to get elected. It’s happened in all Western countries and now all that debt is starting to bubble over.
Here’s the story…
Gold prices usually travel in the opposite direction of the U.S. dollar trend. If the greenback is rising in value against a basket of other major world currencies, the price of gold has historically declined. The opposite is also true: If the U.S. dollar heads down in value, price for gold bullion rises.
Investing in gold is a subject that’s been well endorsed in this publication and the spot market for gold futures has been due for a correction. But, we aren’t getting much of a correction in gold (right now) because global investors feel that investment risk is high enough to justify gold future prices at almost record highs.