Silver Price Boosted by ECB Rate Cut

Artur Baluszynski, head of research at Henderson Rowe, said the ECB pushing rates further into negative territory is “essentially a tax on eurozone banks, and for the already weakened bank-financed economy like the eurozone, this move could spell more trouble.” Two other measures are more likely to provide actual stimulus. The ECB also announced they would be buying 20 billion Euros per month of “net asset purchases”, for “as long as necessary”. This rather vague statement usually translates to “we’re buying bank bonds and some stocks”, although in Japan it quickly…

Should Investors Trust The Rally in Gold Mining Stocks?

The Gold Juniors are bouncing sharply today after news that the ECB plans to cut rates to record low levels, and restart its bond-buying program. While this bounce may be exciting investors in the metals complex, I believe it’s simply an oversold bounce after the waterfall 12% decline in the index the past week. I do not believe we have seen the lows for this correction, and would expect 7%+ rallies to get sold. The European Central Bank’s news out this morning that they are restarting their bond-buying program has…

Will Silver (SLV) Prices Keep Sliding?

A few things your sleepy Gold Enthusiast would like to point out.  First, this wasn’t a straight run-up; there were a fair number of small corrections/fallbacks/consolidations along the way. None as big as the drop the last 3 days, but there nonetheless. Second, the RSI was clearly in overbought territory for a while there. That’s not at all unusual during run-ups, but the RSI peak of 84 was a clear warning not to put any new money in. It can be very hard to know when to sell but it’s…

Should investors buy gold on this dip?

Gold was rejected at key resistance at $1,560/oz, and has been pummeled since. Bullish sentiment on gold has slid to 66% as of Monday’s close, but the long-term sentiment moving average still remains very elevated. I see no reason to rush in and buy just yet, as I believe we will see lower prices before the bottom is in. The past week has been a rollercoaster for those trading the metals complex, and a wake-up call for anyone who chased gold (GLD) in an extremely complacent market. If one is…

Is Gold In for a Bumpy Ride?

Here’s the 3-month chart of GLD.  Quite a run-up there! (credit Fidelity.com) And here’s the 5-day chart of GLD, showing the action on US markets for both intraday and extended hour trading. (credit Fidelity.com) The sudden drop followed directly on the “announcement” of trade talks between the US and China. We use the term announcement loosely here, as tweets, rumors, and unsubstantiated beliefs all seem to count as proper news these days. Whatever happened, investors and traders reacted as if taxes had suddenly been eliminated. Stocks and other equities took off, safe…