This short update comes to you from Cape Town airport where I am awaiting my flight to Johannesburg, and then to Frankfurt and finally Ljubljana (capital of Slovenia) where I will be spending the next few days with a group of South African business people.
I often argued the bull case for gold over the past few months. With gold having surged by $40 an ounce (+4.1%) to $994 this week, it would certainly seem as if renewed interest in the yellow metal is being stirred up.
As printing presses are running at full speed to produce ever-increasing quantities of fiat money as governments engineer the greatest asset price reflation in human history – and the US greenback is heading South – the longer-term fundamental case for the yellow metal is arguably positive.
The shorter-term technical picture is also starting to look interesting. This is explained by Adam Hewison of INO.com who prepared a short technical analysis of gold’s most likely direction and key chart levels.
Click here or on the image below to access the video presentation.
Seasonally, September also seems to be a good month for gold, with an average gain of 2.6% for the month since 1970.
Source: Plexus Asset Management
I am bullish on gold in the medium term, especially as I believe the vast money printing by central banks could set off strong inflation pressures down the road. It is only a question of time before the $1,000 level is breached and I will not be surprised to see bullion remaining in an secular uptrend in the medium term. Add the yellow metal to your portfolios on pullbacks.
