Why do you think that TA is better than fundies?
Why is Gold down with inflation at 5%?
- Thread starter kmiklas
- Start date
This is why I like to go over the fundamentals only to be informed on what's going on as far as the big picture, but I don't trade fundamentals. For instance, I was actually short the dollar Sunday and Monday and there was a small profit on the trade. Fundamentally, I was absolutely right to be short. Stimulus spending, talks of infrastructure repairs (govt spending), rates being steady, yields moving down, etc. But, instead of breaking as it should have, the dollar began to consolidate and every fall was quickly checked, which made me cover my short and get long. All year, I'd been expecting the dollar to rally soon based on the charts, anyways. Nothing has happened fundamentally to justify a dollar rise except individual FOMC member statements here and there but I don't argue with prices.
Look guys, OP basically answered his own question. The inflation up/gold up narrative is around for ages now since it worked in the past.
Now everyone who is into inflation trades already has a position in gold...who is going to buy if everyone has already bought?
If you try to squeeze the last couple of pennies in the most crowded trade, you'll get burned eventually.
Now everyone who is into inflation trades already has a position in gold...who is going to buy if everyone has already bought?
If you try to squeeze the last couple of pennies in the most crowded trade, you'll get burned eventually.
So you trusted the gubmint before Jimmy huh?
I seem to recall a fella they called Tricky Dick and a little old DC hotel named (??) .....gate something or other?
Anyway as for the erroneous gold and inflation coupling, that also goes back to the 70's for the most.
Gold has historically been thought of a store of value from all kinds of risk besides inflation. Such as wars, dictators, bank runs, and other uncertainties.
Currently Gold is in corrective mode from big move up that started in late 2015.
A drop to $1575 and even $1500 not out of the question before any new ATH's are likely to happen.
The trouble with fundies and forex pairs ... is you have to be right on both sides of the equation. The U.S. vs EuroZone, the U.S. vs UK, the U.S. vs etc etc etc
Not to mention all the non-U.S. denominated other pairs.
If you look at any indicator, from bond prices to gold, it's clear Mr. Market believes that the current inflation rate is a short term thing that will go back to what has been normal in a couple months. The market may be wrong about that, but it explains what you're seeing as you're assuming we see sustained 5% inflation while the market is not.
I have a famous bridge for sale at a low price. Are you a buyer?
"Inflation" is an over talked about item right now the big players look past this bs to likely outcomes. Gold isn't likely to do well relative to other commodities when the economy and stock markets are strong. This was always my concern last year when I held a bunch of miners and Gold was around $1900-2000. A strong market creates better alternative places for money; there must be a ton of people who pulled their money and put it into Bit Coin, Energy, Amzn, Banks, ... . I think I sold the last of my big Gold miners in January, beyond some 1-2 day trades. I did make some money on smaller Gold miners in recent months but you have to swing in and out of them based on momentum.
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Rao is a good guy but sometimes a little too hyperbolic unnecessarily.
100% of Wall Street was not negative the dollar.
Anyone watching currencies could see the turn happening well before this past week. Euro, Pound and Loonie (moves inversely) for example: