Technical Issues Drive Gold Price Down but Fundamentals Remain Sound

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It is our belief that the lack of supply entering the market will be one of the major price drivers in the next leg up of the bull market in gold, assuming even a flat to slightly down demand component in the market moving forward.

As a technical breakdown is taking place in the market, the underlying market fundamentals for why precious metals prices should continue a multi-year bull run are only getting more and more bullish. We might be caught in a trap right now where technicals are moving the market, but the fundamentals are only continuing to improve. Eventually, the market will hit an inflection point in the future where the technical trade points aren't going to matter any more; the fundamentals are going to be so attractive for investors, the technical trading picture will get tossed out the window and prices will simply be forced higher. The growing disconnect between positive fundamental factors and negative technical trading activity will sooner rather than later come home to roost, catching many traders off guard.

Before tackling the demand side of the market which can fluctuate quite wildly from year to year depending on a number of different issues, we're focusing first on the supply side of the market, looking at the past supply figures and what we believe should be expected moving forward.

It is our belief that the lack of supply entering the market will be one of the major price drivers in the next leg up of the bull market in gold, assuming even a flat to slightly down demand component in the market moving forward. Should we see increased demand in the coming years, well, then the picture just gets that much more bullish for prices as we march ahead.

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