Source: Clive Maund for The Gold Report 04/11/2017
Technical analyst Clive Maund charts gold’s movements following the U.S. missile attack on a Syrian airbase.
In Britain in the old days there was a saying, which was “Buy on a strike.” It had nothing to do with economics and everything to do with psychology. When a general strike by workers was declared, stock prices would have fallen up to the point at which the strike started, when the economic outlook would have been at its worst, but well before the strike ended they would actually start rising again, as investors perceived an eventual resolution of the problems. Thus, savvy investors who bought when things looked at their worst would have made the best of the situation.
The same thing works in reverse when gold and silver look like they are going to rise due to a ramp up in geopolitical tensions. Thus, on Friday, we had any number of market commentators and “green” investors declaring a breakout by gold and silver due to the apparently increased danger of conflict between Russia and the U.S. after Trump lobbed about 50 cruise missiles at a Syrian airbase. Trump had three main reasons for initiating this strike. One is that he appears to have been genuinely outraged at the chemical attack having seen film of the victims of it, and wanted to hit back at those he saw as the perpetrators. The second is that it couldn’t do any harm to his flagging ratings in the polls, and was likely to boost them, and the third was that loosing off 50 Tomahawks at $1–$2 million a pop is a good way of replenishing order books, and doubtless …read more