I haven’t been too keen on gold recently.
When the shiny yellow metal finally broke higher back in September, I really thought it was headed for $2,000. But after taking the elevator to $1,800, investors must have gotten distracted by natural disasters, football — or maybe it was the new season of Pawn Stars.
Either way, since October, gold’s seen a steady tumble down the cellar steps…
But yesterday was a little different.
Gold graciously tossed us a couple of bucks and popped above $1,680 for the first time since its New Year’s dump.
While that might help you feel a little better about things this week, it doesn’t do squat when you take a bigger-picture view of gold over the past three years:
In case you’re keeping track, that’s 15 months and counting of “meh” from our favorite precious metal. So we’re stuck in no man’s land between $1,550 and $1,800. Sure, we saw some hamburger-steak gains scattered around last year — but nothing compared to 2009-2011.
The most frustrating truth is that gold is an all-too-obvious bet right now. We live in a land of QE Infinity. And the rally in the U.S. dollar peaked in July (the greenback has been breaking down ever since the calendar flipped to 2013).
I know what you’re probably thinking: How the hell can the dollar and gold both drop at the same time? That’s dumb.
Well, you’re kinda right. They can move together. But probably not forever — just long enough to get under your skin.
That makes me think yesterday’s move could be the start of something bigger for gold. Once the market has you second-guessing the legitimacy of your ideas, it’s probably ready to start behaving again.
Plus, a little more upside could attract some new money and improve the look of our chart. So despite the past few months, gold’s “hurry up and wait” situation looks less awful this morning.
For now, just sit on your hands. Panic isn’t on the table yet — not by a long shot. Gold will reveal its hand soon enough.
By Greg Guenthner