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Gold Price, Charts, Ratios, December 2012

Economist and Hedge Fund Manager Shayne Heffernan of www.livetradingnews.com takes a look at Gold.

Gold ended the week poorly with a 1% drop as at the close Friday, November was the second consecutive monthly decline in the Gold Price. Uncertainty, normally a good thing for the Gold Price is now focused on the US Dollar, and that does raise concern to Gold traders. At the center of the Gold question is the US fiscal crisis and the possibility that it may trigger a recession and scare traders in to cash positions, a mistake in my opinion.

Our own research shows that there is no winning in the fiscal cliff debate. Obama wins, the debt ceiling is lifted again, more money is printed and the value of Gold increases. If Boeher wins, and there is a reprieve in tax hikes, more money will come back in to the market and, Gold will go up, the last thing I would want to be left holding is a bag of US Dollars.

The US Dollar is in a precarious position right now, The Fed is pumping it out at a record rate, the Government is spending it at a record rate and companies have more cash than ever before.

Politicians have reduced the Debt Ceiling to a simple political football, if the USA does not raise the debt ceiling the US Government would go in to default, I do not want a bag of US Dollars if that happens. Most likely a deal will be reached, more US Dollars will be printed, and again, I do not want a bag of US Dollars if that happens.

Gold took a dive last week after Speaker of the House John Boehner said US lawmakers from his Republican Party and Democratic President Barack Obama are in a stalemate over a budget deal needed to avoid a $600 billion “fiscal cliff” of automatic tax hikes and spending cuts.

Some institutional investors lightened their gold holdings, worried that failure to reach a budget deal could hurt economic growth and undermine gold’s appeal as an inflation hedge. “There is a significant amount of industry selling in anticipation of higher taxes related to the fiscal cliff,” said Frank McGhee, head precious metals trader at Integrated Brokerage Services LLC.

Read the 10 Page report with all the Charts and Ratio information.

I have added some of the Full sized charts in the Gallery Below, Double Click to view.