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przemyslaw-radomski

Be Careful with Gold, Lucilius

February 15, 2018, 8:38 AM Przemysław Radomski , CFA

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Tuesday’s session was accompanied by volume that was the lowest this year, at least in gold. Yesterday’s volume was definitely not in line with that. We saw one of the biggest daily volumes of 2018 in gold, silver and mining stocks as the entire sector soared. It’s a clear buy signal in the eyes of many. But should something that appeals to almost everyone be automatically viewed as appealing?

In the final part of his 7th letter to Lucilius, Seneca writes the following:

Lay these up in your heart, my dear Lucilius, that you may scorn the pleasure that comes from the majority’s approval. The many speak highly of you, but have you really any grounds for satisfaction with yourself if you are the kind of person the many understand? Your merits should not be outward facing.

Answering our previous question: no – in the case of investments, the fact that something is popular or commonly viewed as something is definitely not enough to blindly accept it. We’ll analyze the situation thoroughly without telling the market what it should be doing in light of either popular beliefs, or our own trading positions. This way, we’ll get to the best conclusions. So, what's really in store for gold for the coming days and weeks?

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Feb Market Overview

Gold Market Overview

Old continent, the global hegemon, and the rising power. Europe, the United States, and China – where will the black swan land?
On the surface, the world is in an excellent shape. There is a slowdown in GDP growth, but the global economy is still expanding well. In most developed countries, inflation is stable, while unemployment rate is very low. However, investors feel that something is in the air. What will, and where, surprise the world tomorrow?
In this edition of the Market Overview, we answer some of these questions. The starting points of our analysis are two important anniversaries. We celebrate 20 years of the euro and 40 years of a market reform in China. We show that although the construction of the Eurozone is flawed, the rumors about the death of euro are exaggerated.

Read more in the latest Market Overview report.

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