Thursday Markets | Gold on Path to War? Always has Been.
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Market Rundown
Good Morning: 7:05a.m. The dollar is up 5. Bonds are strong. Stocks are softer. Gold is up $22 with a high of $1895.80 last night. Silver is just starting to get bid, which is not necessarily a good thing right now. Oil is down significantly but still above $91.00. Crypto is taking it hard. Grains look very good.
The headlines will attribute all of today’s behavior to Russian aggression into Ukraine. But that is a catalyst. If it were true, Oil would also be higher. Secondly, Donetsk has a bombing almost daily. But you cannot deny that this situation is effecting investor psychology. In terms of gold:
There has been Russian based buying since December and it has been known.-
Banks are recommending Gold as a safe haven from stocks and bitcoin since January:
European Crises like Grexit, Brexit, and now Ukraine do force shorts to cover and possibly punt long again
The market is generally less liquid post Basel 3 rules going into affect: UNLOCKED: What Will Drive Gold Prices The Next 70 Days- Analysis
Take your pick. That’s why Gold is up. The events in Europe are a nice little catalyst on top of all that. We talk on this in the podcast below also.
Here’s why Gold is really up:
Gold is Gold today, not a derivative of anything, not correlated to anything. As such it will move form its own interest. Whether higher or lower noone knows from current prices, but it isn’t interest in theoretical correlations today.
Cheers
Podcasts
Today: A lot covered for subs. Active traders with risk, people who want to look at Gold, and investors
Zen Moment
Real or Fake
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Premium Excerpt- Mystery Buyer in Gold Done?
Goldman Sachs lays out what we’ve been talking about for a couple weeks now. Gold reverts to normal behavior as rates get tightened and in QT.
…But we believe the gold real rates disconnect that began since early January and prior to last Friday gold was not correlated to oil and geopolitical risk proxies.- Goldman
Gold doesn’t care about real rates when we are in a QT environment. In QE Gold moved with bonds. In QT, Gold moves contrary to bonds. Gold is playing its normal role again; acting like a hedge for human error.
From the TD report discussed:
Gold: Is the mystery buyer satiated? In the midst of a whipsaw in Russia risk premium, gold prices are providing a faint signal.
The rumored Russian buyer: If you ask us, and some have, the mystery buyer isn’t done, because he didn’t really buy much. The CTA and Bank flows have been buying ahead of him.