Traders will start taking positions for next week’s FOMC meet. Everything is factored in traders before the FOMC on interest rate trend and US economic growth. US housing numbers failed to add gains to the US dollar. This makes me believe that short sellers need to be careful in gold and silver. Gold and silver investment demand is seen from Europe. Asian gold investment demand is more or less zilch at the moment. Asians are looking for a price reversal for investment. Technically short term gold and silver are in a neutral zone. I will prefer to call it as a cyclical trend.
Interest rates are not expected to rise in next week’s FOMC meet. Only there will be a reconfirmation of a December interest rate hike. All is well with the US economy as well as the global economy. There are signs of a small crash in global stock markets anytime. This is not happening. The longer it takes for global stock markets to see a short term correction, the longer will be the next big correction. I know all central banks and politicians do not like a correction in stock markets. All the central banks policies are stock market friendly instead of being employment friendly. But central needs to let the stock market correct on its own so that a bubble does not form. The current global circumstances envisages a continued bull run in global stock markets for the next six months to next nine months. The whole worlds stock markets cannot continue to rise endlessly for a long period of time. A few stock markets will burst. Once that starts, gold and bitcoin will zoom. For the first time I have added bitcoin as a safe haven. Bitcoins and crypto currencies will get safe haven status as time progresses.
This post was published at GoldSeek on 26 October 2017.