In recent days, gold prices have been bound in a relatively narrow trading range with good support from physical buyers just above $1300 an ounce and overhead resistance as the price nears $1320. And, beyond this range, there's a somewhat wider technical trading band between $1280 and $1340 an ounce.
Gold could easily remain range bound in the days and weeks ahead – that is unless some surprising news pushes gold beyond the summer doldrums.
Indeed, if we do see a breakout any time soon, it will likely be triggered by some "outside-the-market" development, possibly emanating from one of the current geopolitical hotspots or some surprising news, good or bad, on the U.S. economy sufficient to alter expectations of prospective Federal Reserve monetary policies and interest-rate prospects.
We remain cautiously optimistic that gold’s next big move will be on the upside – but would not be surprised to see the yellow metal move $100 – up or down – in the blink of an eye in response to some unforeseen geopolitical or economic development. Even a sizable move down would not itself be sufficient to alter our multi-year bullishness.
Meanwhile, the market has been awash with accusations, mainly from a small number of gold bugs and bulls, that gold prices have been manipulated by a cabal of central banks and a handful of bullion trading firms – led by the U.S. Federal Reserve – to prevent gold prices from rising in the belief that higher prices would tarnish the U.S. dollar.
I do not subscribe to these conspiracy theories, even though the recent news and gold-market fundamentals suggest the yellow metal should be moving higher.
The idea that the gold market is somehow rigged by the Federal Reserve, in cahoots with other central banks and the big bullion trading firms acting at the Fed’s behest – all in an attempt to discredit the yellow metal and suppress its price – strikes me as simply ludicrous.
That said, if gold’s next big move is down, we’ll likely hear a chorus of conspiracy theorists claim the market has again been rigged.
However, I do believe that a number of major gold-trading firms and large-scale institutional speculators – acting independently – do have the power to knock gold prices one way or the other when the internal technical triggers and outside-the-market news are properly aligned.
They do so, not because of some secret scheme to support the greenback – but simply to generate trading profits. They are not acting in collusion, but merely reacting to the same market-moving news and information and trading with similar computer models calling the shots.
About Rosland Capital
Rosland Capital LLC is a leading precious metal asset firm based in Santa Monica, California that buys, sells, and trades all the popular forms of gold, silver, platinum, palladium and other precious metals. Founded in 2008, Rosland Capital strives to educate the public on the benefits of investing in gold bullion, numismatic gold coins, silver coins, platinum, palladium, and other precious metals. Rosland also helps people who wish to protect their wealth by including a gold or precious metal-backed IRA in their asset portfolio. Click here for more information.
About Jeffrey Nichols
Jeffrey Nichols, Managing Director of American Precious Metals Advisors and Senior Economic Advisor to Rosland Capital, has been a leading precious metals economist for over 25 years. His clients have included central banks, mining companies, national mints, investment funds, trading firms, jewelry manufacturers and others with an interest in precious metals markets.