If you buy gold from time to time, you probably look for a day or series of days when its climb in price pauses or dips.
Yesterday, October 19th, was just such a day.
The Chinese announced they were raising interest rates, which resulted in the dollar gaining some strength, which led to a fall in the price of gold. At least, that appears to be the chain of cause and effect that played out.
At this point, if you are thinking of buying more gold, you have to ask yourself if the underlying causes of the recent surge in gold prices are still in place.
If they are, then a dip such as we saw yesterday presents a perfect time to do some buying.
Of course, if you think that same chain of cause and effect is going to lead to a longer-term decline in the price of gold, it’s time to sell.
But although the rise in Chinese interests filled people with optimism about the dollar for a while, many of the reasons for the dollar being so low still apply.
My guess is that yesterday we saw a dip in prices that may keep gold down for a few days. But after that, I think it will resume its climb upwards.
Then of course, we will have to see what impact the mid-term elections have on investor sentiment.
Watching gold prices is never dull. : )