Why You Should Buy The Dip In Gold

10.10.22 - Americans Are Losing Their Work Ethic

Gold last traded at $1,668 an ounce. Silver at $19.63 an ounce.

NEWS SUMMARY: Precious metal prices retreated Monday on rising interest rates and a firmer dollar. U.S stocks fell, led by the tech-heavy Nasdaq Index; which hit a 2-year low on spiking interest rates.

Forbes--"It's the job of Jay Powell and the Fed to manage the expectations of people about price pressures. As Bernanke once said, monetary policy is 98% talk. And Powell and company have been doing a lot of talking.

But it's not easy to talk down the price increases that are right in front of our noses every day. And beyond the supply/demand dynamics that are putting upward pressure on prices, it's perception that can lead to behavior, and behaviors (related to inflation) are what can lead a dangerous spiral. For that reason, the Fed worries about perception.

If you're buying today, at any prices, because you think price will be higher tomorrow, that's a recipe for an inflationary spiral. The current housing market is a perfect example....

Clearly gold has been a dislocated asset in this market and economic environment. But that creates an opportunity to see that dislocation corrected....

For gold, fundamentally, the outlook is strong given the explicit devaluation of cash through unlimited Fed QE and seemingly unlimited deficit spending. So is the longer term technical outlook...

This is a classic C-wave (from Elliott Wave theory) here in gold. This technical pattern projects a move up to $2,700."