Gold prices got an early boost but then flatlined Wednesday
after the Bank of Japan joined other central banks around the
world in engaging in economic stimulus and raising the risk of
currency debasement.
The spot gold price, up 0.06%, was nearly flat at $1,772 an
ounce.
"The gold market bulls still have the solid overall near-term
technical advantage," wrote Jim Wyckoff, precious metals analyst
at Kitco.com. "The gold bulls' next upside price breakout
objective is to produce a close above solid technical resistance
at the 2012 high of $1,800.90.
"Bears' next near-term downside price objective is closing
prices below solid technical support at last week's low of
$1,720.00."
SPDR Gold Shares (
GLD
) was unchanged at 171.72 a share. It's just 2% shy of recovering
its 52-week high of 174.
Market Vectors Gold Miners ETF (
GDX
) rose 0.54% to 54.61 -- it's highest price since the start of
March. It's rallied nearly 14% so far this month. That's the
largest one-month gain in three years. It's
Accumulation/Distribution Rating has improved from the lowest, E,
to A in two months.
Market Vectors Junior Gold Miners ETF (
GDXJ
) climbed 1.98% to 25.22 -- a six-month high. It has a stellar A+
Acc/Dis Rating, which means it's under heavy institutional
buying.
"I anticipate further appreciation in gold as countries lose
faith in paper currency, which is a direct representation of the
governments that print them," Jeff Sica of SICA Wealth Management
in Morristown, N.J. wrote. "The use of gold as a protest will
begin to lead investors to gold, putting future pressure on
supply, which will in turn further accelerate appreciation."
The BOJ announced it would increase its asset purchases by 10
trillion yen, or $126.7 billion, to 80 trillion yen to support
the island nation's domestic economy.
"The never ending economic stimulus in Japan was what
paralyzed the economy and will lead to a severe market downturn,"
Sica wrote. He is shorting the Japanese market in hopes of
profiting from falling prices.
"Japan's total public debt at 41 quadrillion yen makes Japan
one of the most indebted countries in history," Sica wrote. "The
economic slowdown and the astronomical debt of Japan will become
catastrophic in the near future."
IShares MSCI Japan (
EWJ
) rose 0.26% to 9.41. It's up 3.3% this year.
The White Metal
Spot silver prices shed 0.29% to $34.78 an ounce.
IShares Silver Trust (
SLV
) shed 0.39% to 25.35 -- it's highest since early March.
Global X
Silver Miners ETF (SIL) rose 1.32% to 25.35, nearly a seven-month
high and just 4% below its 52-week peak.
PowerShares DB U.S.
Dollar Index Bullish (UUP) shed 0.32%.
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