Commodity Trade Mantra

Posts Tagged ‘Central Bank Policy’

At Record Valuations - The Market is Now Too Big To Fail

When large concentration of total asset value is dependent on the market, it becomes necessary to maintain the market at all costs. The market has become too systemically important to allow it to fail. And that means policymakers have changed the function of the market. Today, the market is being used as a (false) portrayal of the underlying economy.

The US Dollar is a Crowded Trade – Why this Matters for Gold

Gold remains not only an important portfolio diversification tool, but also an asset class ripe for a rebound. While gold prices have certainly declined as the USD rises, it might be small comfort to see that gold loses less value than other currencies, it also appears to recover more quickly. Gold behaves like a currency, but one that is not easily manipulated by central bank policy.

Did The SNB Destroy Central Bank Precious Metal Manipulation?

With SNB deciding to take the pain now (by dropping the EURCHF peg) instead of a much worse disaster later after ECB prints money that would make Bernanke jealous, this may be the factor that destroys the ability of Central Banks to manipulate the precious metals. It may have finally destroyed the notion of $800 gold ever again.

QE Ending Because It Was Successful? Then Here Are A Few Questions

Certainly, QE-induced perpetually rising asset prices & sinking volatility, likely boosted consumer confidence through the interpretation of lofty prices as ‘all must be well’. However, those aspects dangerously conspire to produce a false perception about the true state of economic fundamentals. Some simple questions need answers.

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