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Will Plunging Dollar Rescue Gold?

  • Written by Syndicated Publisher No Comments Comments
    August 12, 2013

    The dollar spiked up from the June low to overhead trendline resistance where it triggered another sell signal on technical indicators, and has been plunging back down since.

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    Gold tends to move opposite to the dollar. And it tried to rally as the dollar began to decline again. But was it another false start for gold?

    Although it managed to break out above the short-term resistance at its 30-day m.a. on this rally attempt, it has now dropped back to the 30-day m.a.

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    Global markets still looking toppy.

    There’s still that ominous looking head and shoulders top potentially forming.

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    Are even the larger European markets vulnerable?

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    Interesting question from a reader.

    In response to my weekend article on real estate, a reader asked,

    “Are home-owners who are underwater on their mortgage, or even those who have a small amount of equity in the house they live in, really home ‘owners’? What part of the house do they own? Aren’t they just renting the house from a bank, keeping up the maintenance, making periodic improvements, paying the taxes and insurance on it, all to protect the bank’s investment?”

    “Isn’t a real renter better off since if they want to move, to downsize or move up, they can just move out when the lease is up. The ‘home-owner’ has to put the bank’s house on the market, wait for a buyer, take any potential loss on it, turn the proceeds over to the bank, and probably pay a real estate agent 6% as well?”

    “I know it’s supposedly an investment. In 30 years they will own it. Except that thanks to mortgage interest the house will cost almost twice as much as they think they paid for it, and well over that if they count the maintenance costs. And the average family stays in a house less than 7 years, so has all those thousands of dollars of ‘one-time’ selling and buying transaction costs several times before the 30 years is up. Are there any studies on the true cost of owning a home, in actual purchase and interest costs, as well as maintenance costs over the years?”

    “I know there are emotional attachments to ‘owning’ a home, but I’ve been leasing for seven years and my family loves the better cash flow and freedom I have to do more important things than paint and fix things.” 

    To read my weekend newspaper column click here: Real Estate Mini-Bubble Deflating May Be Economy’s Next Problem

     

     

    Subscribers to Street Smart Report: There is a hotline from last evening, the in-depth ‘Mid-Week U.S. Market Update’ from yesterday, and a ‘Global Markets’ update from Tuesday and in your secure area of the Street Smart Report website.

    Images: Flickr (licence attribution)

    About The Author

     

    Sy Harding publishes the financial website Street Smart Report Online and a free daily Internet blog at Sy’s Free Blog. In 1999 he authored Riding The Bear – How To Prosper In the Coming Bear Market. His latest book is Beat the Market the Easy Way! – Proven Seasonal Strategies Double Market’s Performance!

    It includes our research and analysis on the economy and markets, and provides charts and buy and sell signals on the major market indexes, sectors, bonds, gold, individual stocks and etf’s, including short-sales and ‘inverse’ etf’s.

    It provides two model portfolios as guides. One is based on ourSeasonal Timing Strategy, one on our Market-Timing Strategy.

    In depth updates are provided every Wednesday, with interim ‘hotline’ updates every time we make a trade. An 8-page traditional newsletter Street Smart Report is provided on the website every 3 weeks, in pdf format for viewing or printing out.

    There is the Street Smart School of online technical analysis ‘seminars’,commentaries to keep you ‘street smart’ about Wall Street, and much more. 

     

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