The Institute for Supply Management (ISM) has reported on its October survey results for the non-manufacturing sector. The results are mixed.
Business is rebounding, but imports are way down and exports are way up. In other words, the dollar has been devalued, and the U. S. is not increasingly working away making things for people in other countries.
However, almost no businesses yet feel that they need to increase inventories, and hiring took a nosedive.
Without wage pressure, there will be no real increase in the general price level worth worrying about.
Thus one underpinning of gold's price may be illusory in the short term. Longer term, matters will be very different; but that's life.
Meanwhile, precious metals are soaring. Gold is looking a bit too much like a momentum play short-term to make me happy now. I have been constructive on gold since the blog began late December last year. It has soared even as prices have moved in reverse and healing has occurred in the economy. It cannot be shorted here by ordinary investors. Patient investors who want to accumulate it are in the trap that it may soar non-stop. My guess is that it will have a short-term sell-off to scare the bulls, but that if it rushes straight to the $1200 target that some prominent technicians have, significant profit-taking will then ensue.
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