Commodity Trade Mantra

Posts Tagged ‘Inflation Hedge’

Nothing is More out of Favor than Gold Right Now

Gold is an inflation hedge, I guess people forgot. It’ll respond. Sometimes it just takes a while to get the ball rolling. Best of all, I love all the commentary about how higher rates are bearish. Personally, I love markets that are out of favor. You can’t get any more out favor than gold right now. I have no problem waiting. I’ll be selling when all the chest-pounding, back-slapping gold bears will be buying.

Copper - True Economy Indicator & a Better Inflation Hedge than Gold

When it comes to inflation, which can erode the value of portfolios that don’t keep pace with rising consumer prices, anyone who bought gold as a hedge over the past 25 years missed out on a much better deal — copper. While data show that broad commodity indexes provided the best bang for the buck during periods of rising costs in the US, Copper – “the metal with a Ph.D. in economics” stands out.

Silver seems to be Coiling Back now for a Big Leap-Up soon

In 2016, silver was very strong in the first half of the year and weak in the second half. The first half of 2017 has been something of a wash, setting up something potentially big in the next half of the year. The silver chart shows prices winding up within a huge wedge pattern. A few more weeks of consolidation are still possible before a decisive break out from the pattern.

A Bearish Tilt to the Gold and Silver Market - A Great Risk-Reward Setup

Gold is about to see the 50 DMA above the 100 DMA above the 200 DMA. This golden cross setup is seemingly timed to catch people off-guard given the poor sentiment we see now, yet will trigger buy signals for technical traders & algos. And if you think the stock market won’t be allowed to drop because it’s never allowed to drop, ask yourself WHO has not been allowing it to drop for the last 8 years?

Gold is Good as an Inflation Hedge, but Better as a Crisis Hedge

Whether there is hyperinflation or a banking collapse, Gold has historically been the asset to own in times of turmoil. Given its intrinsic value and safe-haven status, there is no doubt that Gold will remain a wealth preservation tool during financial crises. Crises do not come along often, but when they do, it is better to be safe than sorry. Gold is the perfect crisis insurance.

Secure Wealth with Gold as Brexit moves from a Concept to a Reality

The Brexit process may now be irreversible, but the actual terms of the withdrawal & of any trade agreements that follow are not yet known. They will determine the impact on stocks in the U.K. & elsewhere. There is one market that could benefit as negotiations get underway & that is gold. The focus will also turn from Brexit to a potential Frexit with upcoming French elections in April.

Inflation, US Dollar, Gold & the Interest Rate Action by the Fed

The evidence of inflation is starting to emerge. When will the markets begin to see that the Fed is not serious about nipping inflation in the bud? We don’t know the answer but any rate increase could be the one that looks too timid and too late compared to the inflation data. As the markets begin to take note, the dollar will weaken and gold will once again behave like an inflation hedge.

Run to Gold as the Inflation Beast Rattles Its Cage

Portfolio-destroying inflation is around the corner because of reckless government spending and unsustainable debt, so stock up the bomb shelter and buy gold. The latest data suggests that the inflation beast is stirring from its long slumber, which means that the classic inflation hedge of gold is on the verge of a sustained rally.

Gold and Silver - Lowest Risk, Highest Probability Investments in Today's World

If central banks are successful in reflating the global economy and inflation rises, gold and silver rise. If they are unsuccessful, global economy falters, but gold rises. The size of the moves that gold and silver can make will be dependent on which of the global outcomes will unfold in the next 6 to 12 months & beyond. Either way gold is the best beneficiary of each of them.

Bull Market in Commodities - Central Bankers to be Blessed with Inflation Soon

Commodities are now nearing bull-market territory after rebounding from the lowest level in at least 25 years. Investors have poured more than $17 billion into exchange-traded products linked to commodities since the start of the year. Sharply rising commodity prices since the beginning of the year are a warning sign that perhaps the inflationary times have begun.

Gold Buying by China in a Very Aggressive Motion Right Now

China has gone from being the price taker to the price maker. China wants its currency to be as prominent as the euro, yen & the dollar for global trade. As in the SDR, when you go and borrow the only thing they’ll take for collateral is gold, so the Chinese have been on a very aggressive program of buying gold every month, and we’re seeing that in motion.

Why Gold Is Winning The Money Competition

We’re now getting into negative interest rates on bank accounts / deposits. These are breaking out around the world & Yellen has talked about the possibility of having them in the US. If gold has zero yield & bank deposits have a negative yield, gold is the high yield asset, zero is greater than negative 40 basis points. So gold is the high yield asset; zero is more than negative.

It is all about Gold and Devaluing Fiat Currencies

Gold and silver were used because they held value, were universally recognized, accepted & convenient. Gold and silver were used as honest money until central bankers gained control over the money. If you prefer debt based fiat currencies that can be created by the trillions with a keystroke & devalued overnight, then by all means, trust in those dollars, euros & yen instead of gold.

The Relevance Of Gold - Sprott's 3 Litmus Tests

Some view gold as an inflation hedge, others as a deflation hedge. During times of financial stress, some view gold as an asset to own, while others might view gold as an asset to short, because of gold’s historically inverse relation with the safe-harbor U.S. dollar. Many view gold as the ultimate “risk off” asset, and just as many view gold as the ultimate “risk on” trade.

Readjusting the Time-Preference of Gold

Sooner or later a more realistic time-preference for gold is bound to return as leasing by central banks dries up. This explains why GOFO tried to go negative on several occasions in 2013. All that’s happening is time-preference is beginning to be rightfully re-instated.

Gold is last man standing as Rupee fuels Inflation

Wisdom of Indian housewives’ belief in Gold as a store of value is being seen after rapid depreciation in the Rupee recently – Now consider this a prelude to what will be seen in other economies soon as Currencies depreciate

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