Gold…The “Trade Of The Century”

in commodities •  6 months ago 


Gold…The “Trade Of The Century”


One of last year’s best-performing hedge funds says the “trade of the century” is to buy gold and sell stocks as risk assets are due for another meltdown.

The consensus is pointing to a recession in 2020 or 2021, Tavi Costa, a global macro analyst at Crescat, said by phone. “We think it’s a lot closer than that and we have a number of macro timing indicators that we look at.”

Going long gold in yuan terms and shorting global equities currently explains three-quarters of the hedge fund’s strategy.

“We’re not perma-bears by any means,” Costa said. “This is a very tactical bearish view right now, and hopefully when the market turns, we want to also time the bull market at some point.”

Source

Wow, the trade of the century.  I was only expecting, go to get to $1700, although I have seen some folks out there calling for $5000.

If you agree with Tavi, that gold is going to move significantly higher, one way to play Gold is through the SPDR Gold Trust, GLD.

The investment objective of the Trust is to reflect the performance of the price of gold bullion by holding gold bars and issuing Baskets in exchange for deposits of gold and distributes gold in connection with redemptions of Baskets.

It only makes sense, when the Fed Powell told the world interest rate hikes were going to be put on hold, it became a risk on environment again.  Thus, GLD has underperformed the SPY year to date.  But as the economy continues to slow and Fed Powell begins lowering interest rates in the future, the US dollar and the US equity markets are going to fall and GLD is going to get the last laugh.

NOTE: Red line is SPY and blue line is GLD

So what can we expect from gold at the present time, lets go to charts to find out?

Monthly Chart (Curve Timeframe) - the monthly demand is at $109 and monthly supply is at $129.

Weekly Chart (Trend Timeframe) – the trend is sideways, but the current momentum is to the upside.

Daily Chart (Entry Timeframe) – the trade set-up was two weeks ago when price pulled back to the weekly demand at $121. If this is going to be the "trade of the century" the chart suggest to wait until price breaks the monthly supply first.

This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.


Published by Rolland Thomas
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Pity I only saw this after publishing my own post on the topic. I'm very bullish on gold now - once it starts running that $1700 should melt like butter under a blowtorch!

Yes, when the Feds introduce QE again, it's on.

Which is always only a matter of time...

It is also very fun to collect some of the physical stuff as well! I wonder if Silver can also have a benefit as well as it seems to be even cheaper in relative terms.

Posted using Partiko iOS

I think Silver is the sleeper and will rise even more.

Gotta admit that title got me intrigued. I hold a small position in gold but focus more on crypto...might have to revisit the commodities market.

Crypto isn't mature enough, so money will go to gold.