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At SchiffGold.com, Peter Schiff discusses how gold and bonds are responding to global events and economic data:
After the CPI data came out last week, gold rallied. On his podcast, Peter Schiff talked about the rally and the trajectory of gold. He said we can expect even bigger moves up when the markets figure out the inflation problem isn’t solved.
After the better-than-expected jobs report came out on Oct 6, we had an outside reversal day in gold, meaning the price took out the low for the prior day and then closed above the high for the prior day. As Peter noted in a podcast, that typically signals the end of a trend. “In the case of gold and silver, the trend that was ending was the downtrend.”
On Friday, Oct. 13, gold charted a huge rally, up nearly $64 on the day. That represented a $110 swing upward from the low a week earlier.
That is a significant move in one week for the price of gold.”
The big decline in gold leading into the jobs report was due to swiftly rising bond yields. The short bear run took the price of gold down to the $1,820 an ounce range. With the rally on Friday, gold recovered almost the entire decline.
Gold has almost done a complete round trip. So, the money has come in to buy the dip in gold, which is what I expected. The next thing for gold to do is get back above $2,000. That’s where the resistance is.”
Peter said he thinks if gold can break through $2,000 an ounce and hit $2,100, we’ll see a quick run even higher with $64 up days being “par for the course.”
I think we’re going to have a lot more of these days. In fact, I think we’re going to have bigger days. I think we’re going to see days where gold is up more than $100 a day because gold has a long way to go to catch up to where it needs to be.”
Silver charted an outside reversal day on Oct. 6 along with gold. It was up 90 cents the following Friday to $22.73.
Oil was also up big that day. Peter noted that he’s been saying he expects gold and oil to go up in tandem.
Meanwhile, bonds rallied as well. Peter said this was primarily due to the conflict in the Middle East.
He thinks a lot of people are downplaying the situation there in terms of the potential impact.
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