Commodity Trade Mantra

Posts Tagged ‘Stock Market Valuations’

Fundamentals in place for Gold with Fed Tightening amid Unjustified Stock Market Valuations

The S&P 500 Index has reached new, all-time highs. While the current stock market does not have the same feeling of mania seen before the tech bust, in the context of an economy that struggles to achieve 2% growth, we struggle to justify current stock market valuations – and remember, the Fed is tightening. Gold should also benefit if the US dollar trend seen so far in 2017 continues.

Gold and Silver Strong – Banks and Stocks Scary

European Banks are worth watching. The failure of even one modest-sized European bank will send ripples through the world financial system & would likely drive significant safe-haven buying in gold and silver. Valuations are widely acknowledged to be at nosebleed levels versus historical norms & individual investors are fleeing equity markets. Gold and silver benefit during a selloff in stocks.

Silver “Particularly Cheap” as “Blood On The Commodity Streets”

Key commodity price ratios, such as those between precious and industrial metals, are already at levels associated with financial crises such as that of 2008. In other words, there is already ‘blood on the commodity streets’, presenting investors and commodity traders with potentially attractive opportunities.

We’re in an Era of Central Bank Worship

On the subject of bond markets, “does it not seem incongruous to chase low-yielding fixed-income securities denominated in a currency that the central bank is vowing to inflate?” Why do you think that investors go into bonds despite the Fed’s intention to devalue them over time?

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