We are in a very volatile environment with bouts of inflation and deflation fears going up yearly. Given that the federal government has, depending on various estimates, $70 – $200 trillion in off-balance sheet debt and obligations over the next couple of decades, we are seeing inflation much higher than reported in the grocery store, gas pumps and elsewhere. So, when politicians say, ah, look companies are showing tremendous profits, and no worries, Christmas is around the corner so shipping will double, and as for oil prices, well look, they have come down.
Everything is stabilized, even if you don’t have a job to get to work. Now that Apple products are hotter than ever and tech is humming, and if people need money QE3 QE4, QE5, QE100 will be available with Uncle Ben to stave off recession. But with that many little green pieces of paper floating around, how much is any one of them going to be worth?
While muddling through, EVERY indications shows, (employment, GDP, ISM, sentiment, etc.) is far below, which should speak volumes. No matter how one analyses the situation, analysis is not driving any policy apparatus. Politics is. Keeping this in perspective, it is also what plays Russian roulette with the dollar that sends fear warnings to investors. The lower the dollars value, the more strength gold regains. There was a bit of bargain hunting as the market tried to stabilize in the past three days, but it’s in a great consolidation mode once again. “Gold regained strength Tuesday after prices dropped. Worries about recession which will directly or indirectly shape the future, will step up the yellow metal…” says Regal Asset Team of Analyst.
Worries about recession in the United States will step up the yellow metal market. Politics aside (and yes, that is a big factor to ignore), the volatility in the current market is about half a genuine view of economic data and half a result of blatant manipulation.