Word is out today of last-minute compromises offered by Greece. The impasse with its European lenders may be over before this week’s deadline. Or not. But equities markets are rallying on the hope.
Gold is down 1.57% ($19) as we go to press.
That’s not a huge move, in the volatile gold market. But it is interesting. It shows the measure to which Greek default was priced in. That small measure, in turn, tells us that most of gold’s market valuation today has little to do with EU politics.
Good to know.
But so what? Can we make money knowing this?
Well, it’s yet another sign that the bottom for precious metals has real support. That means that it’s a price that’s attractive to many buyers around the world. And that supports our view that gold’s next major move will be up. Invest accordingly.
What about today’s action? Is there a short-term spec on gold being oversold today?
There certainly is. Any stupid, stubborn remark by the Greeks could reverse today’s action in a heartbeat. But that’s no sure thing. Greece may have intended a last-minute deal all along, hoping to get better terms. There are many things I’m willing to speculate on, but the intentions of the twisted mind of a Greek politician are not one of them.
On the other hand, with gold and gold stocks already on my shopping list, today is the sort of day I’d buy. A sharp drop in gold creates the perfect environment. Look at the bid-ask spread of your favorite precious metal stocks, and ask for just a bit less than what the last bidder did. See what you can get.