If your mental currency is based on the dollar then all your faith is in the dollar. If you buy gold today for$1200 and when you want to cash in it is $120,000 all that means is the dollar has gone down and your $120,000 will buy what $1200 bought before when you bought the gold. You don't really make money in hard assets, they just keep you even.
is trading oil just trading the dollar
- Thread starter billyjoerob
- Start date
An idea of supply and demand you completely ignored. What if the reason gold is worth $120,000 is because they figured out how to use gold to go back and time and save harambe. With all other variables being the same. If everything stays the same hard assets remain even to a point. But silver has lost its value over the last x years compared to gold. So is gold worth more or silver less. Supply and demand play a large factor in all assets.
If you invest (e.g. don't trade) in a hard asset with a long-term view, the bare minimum you do is to hedge the currency, especially on assets such as gold where you can buy on margin.
CannonTrading_Ilan
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Crude is affected by the us$ and longer term price movements are influenced by that, supply and demand but there are so many other factors going into ( day) trading crude oil futures. I wrote a short article about it that may provide some ideas: https://www.cannontrading.com/community/day-trading-crude-oil-futures
That CL analysis was from over 3 years ago. Would be curious to see what your analysis these days is, now that OPEC is making funny with production caps.
Oil and the markets' expectations for inflation are inextricably linked, see the following chart for the price of crude vs the expectation for inflation 5 years hence.
Higher crude means inflation is coming which drives up interest rates in anticipation of this inflation.
from Otterwood Capital Management
Higher crude means inflation is coming which drives up interest rates in anticipation of this inflation.
from Otterwood Capital Management