Gold Prices Jump On Further Rate Increase and Forward Guidance

Gold prices jumped $30 from the lows after the FOMC rate increase of 25 basis points. Along with what was a largely expected rate hike, the Fed hinted that rate increases may continue in a steep upward curve over the next few years.

Alongside the hike came comments that the Fed intended to sound hawkish without causing to much disruption and the inflation target remains at the stated 2%.

The FOMC comments were, “near-term risks to the economic outlook appear roughly balanced, but the Committee is monitoring inflation developments closely,”

The US Dollar promptly moved down in a sharp move, as is often the case on these FOMC days. Gold prices reacted to the upside sharply and they are now consolidating at the highs in early UK trading.

Gold has got that 2018 resistance in sight. The early year highs of $1360 area seem like an obvious place for the price to try test investors appetite for higher prices.

If Gold breaks out above those highs and can continue to be strong then the $1500 area could be a target.

Gold has not been able to reach this area since early 2013, and to break free of the constraints of the last 5 years would be a significant move, not only for Gold traders but for mining and metal stocks.

As we suggested last week here, mining stocks have been lagging behind what is a relatively strong Gold price this year.

A break of resistance into a new higher trading range could be just the tonic for those weary miners, who incidentally have not been doing too badly in terms of profit. Its sentiment which is holding them back and a higher Gold price will set the tone for new money to pile into the sector.

It could be the investment story of 2018.

from http://www.livecharts.co.uk/livewire/2018/03/gold-prices-jump-on-further-rate-increase-and-forward-guidance/

Crypto Markets Crumble But Don’t Be Fooled

So it seems the haters were correct. The crypto market bubble did actually burst.

Back in late 2017 some famous faces chipped in their opinions on the magnificent rally that crypto was making. Luminaries such as Jordan Belfort declared Bitcoin’s price a bubble, Warren Buffett said he was almost certain it would end badly.

These comments were not taken in good spirit by many hardcore investors of Bitcoin and other crypto at the time.

And Twitter was offended.

This prompted the endlessly entertaining crypto bull, John Mcafee, to promise he’d eat his dick on live television if Bitcoin wasn’t $100,000 within a year.

A sight to behold!

But then came January, and with it came a whole bunch of news and negativity which began to test investors nerve over the following weeks.

The widely covered Bit Connect collapsed. Rumours of a Korean crypto ban. The SEC meeting to discuss what to do about crypto. An Mtgox guy began selling his billions of Bitcoin. Facebook and Google banned adverts for crypto. An upcoming G20 meeting which investors feared crypto regulatory measures might be discussed. Oh and a few exchange hacks just to keep everyone on high alert.

Which brings us to now. Bitcoin is down circa 60% from it’s all time high. Ethereum much the same. And a market full of alt-coins whose market cap has halved or more during an incessant slide into February and March. (see Cardano or Ripple).

But here is the thing.

Nothing has changed.

Well, nothing has changed with the technology behind blockchain. If anything, it’s improved.

Developers have been striving to improve network speed, as in the case of Bitcoin’s lightening network and Lightening Labs. With the aim to scale transactions on the Bitcoin blockchain to millions of new users in the coming years.

Ethereum has seen a boom of use. ICOs have been taking advantage of creating ERC20 tokens on the Ethereum blockchain for a while now, and it doesn’t look like stopping.

Companies such as Factom are making waves in the financial sector by creating a product that helps secure and validate mortgage information on the blockchain.

And don’t discount some of the groundbreaking ICOs which have been surfacing. (ok, disclaimer. There are a lot of trash and obvious cash grabs out there too.)

So where does crypto go from here?

It’s pretty clear that blockchain technology is going to change a lot of industries for the better. The next decade will see many changes.

It’s going to simplify tasks for corporations and individuals. It’s going to secure many unsecured processes. But it’s also going to create a lot of job losses within said industries due to these changes.

It’s time for those affected to evolve or be left behind.

There’s hidden value in many crypto alt-coins. But you have to dig deep and research the companies behind each project using a large magnifying glass.

Remember this technology is still in its infancy.

Think real world use for their blockchain and true problems to solve. Think teams of experts with experience in their industry. Ignore the fluff.

As for Bitcoin itself, who can really say?

It has a real world use. It has a lot of areas in which it can evolve. It has many experienced and intelligent people working with it.

It will be improved.

But before it can change the way we pay for our every day items, the powers that be are most certainly going to attempt to get it under close control. It’s the way of the world.

There is value in Bitcoin and it seems John Mcafee can see the future.

Is he right?

Time will tell.

from http://www.livecharts.co.uk/livewire/2018/03/crypto-markets-crumble-but-dont-be-fooled/

Gold Stuck In Rut – For How Long?

The first quarter of 2018 has given very little excitement to those who trade Gold. Prices have been range bound in a tight area around the highs of the early 2016 rally.

There’s some resistance up here, and it seems like the price is waiting for a catalyst to decide what happens next.

It’s entirely possible that the catalyst will be something as simple as sentiment.

As Adam Hamilton has noted in his latest essay Gold mining stocks are struggling for traction. Even though Gold prices are at a high area of the past few years.

Adam comments, “The gold miners’ stocks remain deeply out of favor, trading at prices seen when gold was half or even a quarter of current levels.  So many traders assume this small contrarian sector must be really struggling fundamentally.  But nothing could be farther from the truth!  The major gold miners’ recently-released Q4’17 results prove they are thriving.  Their languishing stock prices are the result of irrational herd sentiment.”

Could it be that investor sentiment is holding back Gold prices from continuing to climb?

Sentiment could well be suffering as investors are hesitant on the Fed’s interest rate policy. Interest rates were hiked at the back-end of 2017, and speculators seem to think that the intended range is higher than the 1.5% right now. Maybe at or above 2% is where some commentators think rates are heading.

This, coupled with a volatile stock market, could be why those pesky Gold mining stocks are languishing behind a relatively strong Gold price.

There’s another monetary policy meeting on the horizon, so it will be interesting to see what the comments are. It’s probably the catalyst Gold is waiting for.

from http://www.livecharts.co.uk/livewire/2018/03/gold-stuck-in-rut-for-how-long/