Why Do News Headlines Move Precious Metals Prices?

Introduction: Anchors in a shifting world. The strategic case for precious metals with Monex and CPM Group.

Sean Brazney: You and I got together last month. We talked about the metals being in a range and kind of range bound for both gold and silver. Sure enough, that is what’s been playing out. We seem very, very, range bound and stuck on the news. Based on this range we’ve been in, do you think we’re going to stay range bound? How long do you think we’ll stay range bound? And what is the news that you think might either break us out to a better high or maybe even break us to some lower lows?

Jeffrey Christian: It’s very interesting. I think you have it right. A) we’re range bound and B) the markets, not just precious metals, but all markets have become incredibly news dependent. They’ve moved away from trends, and trend analysis, and basic financial analysis, and they’re just reacting to the news. That causes or contributes to this range boundness.

Our view is that we are range bound. We’re probably going to continue to be so, for the next three or four months, through the summer. There are some seasonal patterns that fade to it. There’s going to be continued… the markets will continue to react to the news and it’s going to go up, and it’s going to go down. The news is going to change from day to day. We’re going to be on the verge of ending the Iran war and then it’s going to look the next day as if the war has no end in sight and everybody’s being intransigent. You’re going to have the midterm elections, the congressional elections coming up. There’s going to be various court battles, redistricting, scandals, scandal revelations, and I think that the markets are just going to bounce back and forth for several months being buffeted by all of that stuff.

My own view is that by late August, early September, there’s some clarity that will start to emerge and we’ll see the trend. Our expectation is that in the end the trend will be upward. You’re right, we could see a spike down in gold and silver prices at any point during that next four months, but I think that longer term the trends are still there. All of the fundamental and economic and political factors that have been driving investors to buy more gold and silver, they’re still there, if not worse than they were four months ago.

Sean Brazney: Yeah well, reminding our viewers and listeners to be strategic. Call Monex, talk to an account rep, and get your free report.