December 16, 2013
Weekly Market Outlook
By Keith Schneider
As the year comes to a close, it's the time of year that certain primates (traders for example) evaluate their portfolios to see what worked and what did not. Certain trading primates, such as the die-hard gold bugs, will have to deal with the fact that for the first time in over a decade Gold actually was down on the year. Considering that inflation is on the decline, Stocks are up, the economy mending slowly, stimulus money is not circulating, while interest rates jumped, it's not surprising that Gold got hit hard.
Many of the yellow relic's biggest supporters are expecting a drop of almost 25% from current levels. However, Gold is still hanging onto lows made in June. If those levels are breached, selling is likely to accelerate with next support at around $1000 or so. If we can take out a the $1290 level in spot gold and the nearby declining 50 day moving average, gold could become a surprise mover for 2014.
Right now, hard money primates should be contemplating whether or not the market is mimicking what happened in 1974-76 when Gold corrected from $200 an ounce to $100, before its parabolic move in 1980 to over $850, or if Gold has already completed its run in 2011, in harmony with its usual 11 year cycles. If those die-hards move to the belief that gold has already made its move, then it also indicates that it should take another 20 years before gold tackles the old highs. This will finish off whatever remains of an endangered species and move them to an extinct status.
Currently, it is interesting to note, making the endangered list are the Aden Sisters, world renowned gold analysts, who believe that gold's big run is still ahead and on schedule to complete its move by 2019.
The US equity markets remain very choppy, very common in end of year trading, as profit taking and tax loss selling take hold.
Check out this week's video for critical levels in key markets.
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