Gold
So Gold is in an interesting spot.
Technicals
I just sold my GLD position. We are bouncing of downtrend. I am happy to wait a few days and re-enter if we have broken thru and are above the short term top of around $122.5
After that I become a Gold Bull. I will become a Mega Gold Bull if we go above 1370. That would indicate that the bottom is in and has been broken out of. I find this very likely if we go above 122.5
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Fundamentals
I think the fundamentals are somewhat strong right now as the economic and debt issues emerge. I think we always have to be careful with these thoughts as there is the FED that can kinda fix any issue that comes with our beautiful ponzi scheme that is the Dollar.
But all this can change if the stock market just goes higher from here.
I also think that the FED probably has learned over the last several crashes how to deal with such economic and bank troubles a bit more effectively, so I will never trust this bear case until I see it, and without it the case for gold is mediocre.
If the economy has no issues, the debt problems are being fixed by the fed, the euro does not crash then gold will have a hard time ralling.
IF these things emerge than Gold will become one of the best hedges, as well as a great technical trade that may push this thing up quite a bit.
I do not believe in a new Gold Standard
There are two main reasons. The powers at be won't benefit from it. The FED especially would lose most of its power and currency manipulations and ability of governments to just overspend when they want, would become a problem.
That is a very strong reason against a gold standard. Another reason is that the strong economies such as the US and China do not have a lot of gold, relatively.
If gold becomes money than all of a sudden a country like Germany has 1/2 as much money as the US, with a GDP that is 1/5 and absolutely no international power. China is even worse. Germany fucks up the EU has all this debt to deal with from other EU countries and now all of a sudden becomes super strong again? I don't think so. Why would the US and China want something like that?
So fundamentally there are pro and cons.
However as long as there are economic and currency issues Gold will always be the first fall back everyone thinks of and as such people will use it as a hedge and maybe countries as well.
I like to trade on fundamentals and technicals together which is why I will buy more when the downtrend is conquered and the stock market is going down. If there are real economic issues I will buy even more and make it a majority of my stock portfolio investment.
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China has been buying gold for a while. It's probably just a hedge and maybe they (or Russians) would make sort of a Gold backed secondary currency to attack the dominance of USD. But that's the furthest they would go IMHO. Maybe few governments would have somethig to gain from a gold backed currency but neither of them will have massive military power as most militaries have been built on debt.
The funny thing is that Gold (even after this whole bear market thing) has been a far better investment than stocks in general:
It's good to optimize your entry points. But at the current prices a person could just buy a bunch of Gold and sit on it and have it be a better investment than getting to some index fund or active management. Sometimes doing nothing is the best way. Bill Gates would be worth almost 400 Billion USD if he never invested his money and just sat on his MSFT stake and trusted the potential of his own company.
Like i said, i will be back in there very quickly if we go above 1.22.
Crazy how poor stocks have performed long term inflation adjusted.
Bonds are basically break even.
Stocks have gained 50% only.
In 30 years!
I Didn't know that. I'm not completely surprised but that's just terrible. There are developing countries where banks pay 5%-6% interest on savings accounts. Most tech companies don't IPO until they are huge and most of the best investments are locked out for those who are not accredited investors. Crypto is real blessing because the only other way you are can gain similar returns (to my understanding) is OTC and emerging markets with high risk, less moat and low liquidity.
Keep in mind that a break of 1286.70 will halt the expected decline and lead the price to achieve positive targets starting at 1316.65
Good
Posted using Partiko Android
I agree with you as the real scenario to overload on a position is a disastrous one which I don’t see in the short term. However, another benefit in a position will be that the effort currently being made by central banks and governments will potentially lead to inflation. While it has been tamed thus far, I think we are near a breaking point for the most expensive inputs which are wages which have fallen short to expectations but employment imbalance seems to be growing.
Posted using Partiko iOS
There is a lot of inflation that would have to happen before a return to the gold standard could happen. There's not enough to support a currency with the values at current levels.
Remember that GLD isn't actually gold. The last I heard, there were 162 ounces of paper gold sold for every 1 ounce of physical gold that is available for delivery. If too many people want delivery, it could fall apart and 161 people are going to be left with just a piece of paper that says they're owed gold.
Yes i am very aware of this! However in my retirement account which is where i can trade tax free an etf is the only way to go.
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