NEWS
ENVIRONMENT   Precious Metals  

Gold: the calm before the hyperinflation storm

As a fellow gold bug and a long-term believer that eventually there will be a day of reckoning and prices will explode to unprecedented levels, I have to say I am very disappointed in the performance during this latest crisis. Maybe it's the short sellers; maybe it's the failing miners selling forward production or just being a victim to margin calls in equities, it appears that gold has already made its top on this cycle.

When monitoring any investment, I always try to keep the strategy simple and identify red flags that would go against my beliefs that a market is going to perform a certain way. Just a few takeaways that I am seeing are that investors are continuing to purchase U.S. equities and accelerate those purchases by dumping safe-haven assets like gold and silver. This is because investors have a fear of missing out on the "big rally." This is neither right nor wrong, it's just that metals are not their primary asset. Something else gold traders seem to be hanging their hats on is that the FED will come in and throw the kitchen sink at supporting this market through economic stimulus. The reality is that since this is an election year, the democrats will not give President Trump one more dollar than he needs because the last thing they want is for him to economically pull through the damage of the coronavirus and have an explosive recovery into the election. The stimulus will be small and targeted specifically to airlines, cruise industry, automobile industry and finally, the energies but that is a result of the Saudi/Russia oil price war.

Now that you are completely mad at me, there is hope.  Once this is done, we will go through a period of deflation; this is where people avoid spending, traveling and large social gatherings. After that, we should see a period of hyperinflation as a result of the countless central banks globally slashing interest rates to zero and that's the market you do not want to miss out on.

Looking at different approaches to trading these markets, we have expanded by adding a fully institutionalized research department with actionable trading recommendations. Our recommendations are comprised of limited risk options strategies, to receive more information please register here:

Looking at the technical backdrop, there is one major chart pattern that sticks out for me and that's the double top. The market failed last Sunday night at $1704 and has failed to rally under any situation and appears that we must go lower in order to stretch higher.

My downside target is the old resistance which is now new support at $1619. Watch for this level to be achieved and then the possibility of value buying and diversification to come back in on the hopes of an inflationary environment occurs later in the cycle. I am putting together longer dated option strategies to try and take advantage of that later move and aggressive strategies for this short-term correction. 

 

News No: 8689
Date: 2020/03/11 - 22:50
News Source: www.kitco.com

Gold  margin call  miners selling  technical  environment 

Comments:

Leave a Comment:

   
   
   
 

Market Nuggets RBC's Gero: Comex gold drawing safe-haven bid

Gold is higher on a morning when the market is again drawing safe-haven buyers, said George Gero, managing director with RBC Wealth Management. He pointed out that holdings of the metal by exchange-traded funds have been rising lately.
 

Odisha Auction 2020 : 14 Companies in Race for RP Sao Guali Iron Ore Mines

Odisha govt had invited bids for grant of Guali iron ore mining lease having EC of 5.7 MnT pa. Due date for submission of the technical bid was 20 Feb'20 following which opening of technical bids is scheduled today and conduct of ascending forward electronic auction and submission of Final Price Offer is scheduled on 17-18 Mar'20.
 

Commerzbank: ETF holdings of gold rise but fall for platinum

Exchange-traded-fund holdings of platinum have fallen sharply this month, while holdings of gold keep rising, Commerzbank said. After big inflows last week, holdings in gold ETFs tracked by Bloomberg increased by another 16 metric tons Monday, putting them above 90 million ounces or over 2,800 tons for the first time, the bank pointed out.
 

Xinjiang Amer Qian Golding Cable has ordered a CONTIROD®*copper wire rod plant from SMS group

Xinjiang Amer Qian Golding Cable Co., Ltd. from China, a subsidiary of Amer Group, has placed an order with SMS group for a CONTIROD®* casting and rolling plant to produce copper wire.
 

Barrick unveils 10-year plan to become world’s most valued gold miner

Barrick Gold (TSX: ABX) (NYSE: GOLD), the world’s second largest gold miner, has unveiled a 10-year production plan aimed at becoming the most valued bullion company.
 

Fortuna resumes operations at San Jose mine

Fortuna Silver (NYSE: FSM, TSX: FVI) announced on Thursday that the blockade of the roads in the municipality of San José del Progreso which prevented access to the San Jose Mine has been lifted.
Upcoming Events
Publications
 Mines & Metals

Mine & Business Today

 Scrap & Recycling

Ahangan

Our partners