By Jeff Kerr
Safe haven demand and technical chart buying have been in full force lately pushing gold to 5.5 month highs in recent days. Gold reached $1297 today while the U.S. dollar remains strong.
“As of Tuesday, January 20th, we are witnessing gold’s strongest seven day run in eight years”, according to CNBC. “Gold’s strength alongside of the stronger dollar indicates competition between the two as a safe haven alternative”, says Jeff Kerr of Republic Monetary Exchange. “Many analysts who were waiting for the second half of the year 2015 for gold’s time to luster have abandoned the “wait and see attitude” and have jumped on board for fear of being left behind.”
“The U.S. Dollar will remain strong against all major currencies this year. As was the case last year, the dollar prevailed with gold a close second. In spite of a strong dollar, gold continues to advance. This year, it’s gold’s time to shine. This is only the beginning”, he added.
Dennis Gartman, author of the well-respected Gartman Letter reported last week on CNBC that the decoupling of the Swiss Franc from the Euro was a game changer and will propel gold through the end of this year and beyond.
“My better trade for the year will be the same trade that has been the better one for this year and the better one for the previous year, which is to be an owner of gold,” said Gartman. “The Bank of Japan has been expanding its balance sheet. The ECB is going to expand its balance sheet,” said Gartman. “Those currencies have been weak. They’re going to remain weak.”
In an interview with CNBC.com’s, Futures Now, precious metals and mining analyst Michael Dudas said that gold should continue to benefit from central banks’ efforts to devalue their currencies. Gold prices rose more than 2 percent Thursday to a four-month high after the Swiss National Bank shocked the world and said it would abandon its euro currency peg. The precious metal is now up more than 10 percent year to date.
“All of these central banks are all going to debunk their currencies, and it’s going to default to just one currency that can’t be debunked, and that’s gold.”
“Gold in terms of euros is at its highest level since May 2013,” Dudas said. Many investors expect the European Central Bank to announce a major stimulus plan when it meets next Thursday. That could also drive gold higher.
Gold has rallied nearly 14% from the low made in November of last year almost unnoticed, a $150 move. Further evidence of strong demand for gold is the addition of 834,000 ounces of gold ETF’s, (Exchange Traded Funds), added in the last two days, the most in five years.
As we have been indicating on our Weekly Blog, the time to buy gold is now while prices are well under the three year average. During the month of February 2011, gold traded at a low in the $1330 range. By August of 2011, six months later, gold topped $1900 per ounce.
The time is now, call your RME representative today. (602) 955-6500 or 1- (877)-354-4040