What's Wrong With This Picture?
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Even after watching markets for 38 years, you always have to ask the question: “what’s wrong with this picture.” The equity markets are under extreme pressure and out of nowhere volatility is through the roof. The VIX rallied 100% on Monday and is up 400% from its lows. Interest rates are at 5-year highs and yet gold has done nothing
From the movie Trading Places when the Duke Brothers were trying to corner the Frozen Orange Juice markets, Mortimer says to Randolph “That can’t be Right” how can prices be going down. This is the same way I feel about gold.
On Monday when the Dow was down 1500 points, gold was still lower, the although it did rally by the end of the day. Looking at all the factors: the weakest dollar in 5 years, full blown panic in the markets and treasury bonds spiking higher, why was gold stagnant? The answer can only be that it wants to go lower. The technicals support a move lower in gold; until the market can break out over 1362, we will stay on the short side as traders.