Gold's Bigger Picture: Buy, Sell, or Hold?

 | Jul 12, 2017 | 3:57 PM EDT
  • Comment
  • Print Print
  • Print

Over the past two years writing for Real Money I have weighed in a couple of times with my technical "two cents" on gold and select mining companies. It seems like a broken record at times but the long-term argument in favor of gold is that it is durable and has outlived many empires over the centuries including the Egyptians, the Greeks, the Romans and others. History has shown it is risky to trust paper currencies. Gold is still here as a store of value while the currencies of those civilizations are all gone.

Gold is a rare metal with jewelry and industrial uses and has served over thousands of years as a hedge. Over shorter periods of time the hedge may not work or work poorly.

Think about some of the countries that suffered severe currency devaluations over the last several decades -- Germany, Russia, Brazil, Argentina, Venezuela. Gold helped savers in those countries to conserve their savings. Stocks went up, too, but selection and timing then becomes more important.

Gold's price history is that it has strong upside moves for many years followed by long sleepy periods. The big rally in the 1970s with gold passing $800 for the first time was followed by depressed prices for many years.

More recently gold peaked in 2011 at $,1920 and declined to around $1,040 in late 2015. In this chart of the GLD, above, the levels are different but you should get the picture.

The market would turn more bullish if gold could break and stay above $1,300 on a weekly basis. There is also significant resistance around $1,500.

A break of supports around $1,160 and $1,120 would probably precipitate lower lows.

Columnist Conversations

KMX is heading for a nice finish. The stock is up just over 2.7% and is one of the top ten gainers in the SP 5...

BEST IDEAS

REAL MONEY'S BEST IDEAS

News Breaks

Powered by

BROKERAGE PARTNERS

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.


TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.