Gold: A Stelar Picture

www.investing.com/analysis/gold-a-stelar-picture-200615419

By Gary Tanashian | Jan 20, 2022 03:56PM ET

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As today’s (Thursday’s) market activity shows, the bubble is still in force as US stock markets/sectors generally remain intact (for the most part, with some notable exceptions outside of the headliners, as certain table legs get kicked out). But gold is in a beautiful Cup & Handle structure.

What’s more, gold’s ‘real’, the commodity-adjusted price has been declining since the overdone 2020 upside as well. Risk is with commodities (and stocks), and reward – with patience – is with gold and gold stocks when they leverage a future macro.

Factor in a January Bank of America (NYSE:BAC) Global Fund Manager Survey showing trend-following managers piling into the cyclical/reflationary/inflationary ‘reopening’ trades (Banks, Industrials, Commodities, Materials, etc.) and absolutely puking Tech, Bonds and defensive Healthcare and you have a recipe for all hands on one side of the boat.

And that side of the boat is NOT gold’s side of the boat. The story goes that gold does not like rising interest rates, after all. Nominally, they have been rising across all maturities.

For humorous effect, I’ve added the 30-year Treasury yield as adjusted by the CPI (not even a real measure of inflation, but work with me here), showing the ongoing farce that is real yields, current Fed taper fears, and resulting nominal yield rise be damned.

So with CPI-adjusted yields so far depressed, what is needed to send gold on the next leg up? As I’ve been saying since the party started in mid-2020, stocks and commodities need to top out nominally and/or in relation to gold. That is not yet in play. But it’s coming.

30-year yields, Gold, Gold/SPX

Beyond that, draw your own conclusions while realizing there is a present and there is a tomorrow. You may or may not consider this a gold pump piece. But I’ll tell you this; it is far better to be boosting gold now than it was in mid-2020. Current risk vs. reward says so.

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US 30	32,115.8	-4.5	-0.01%
US 500	3,974.6	-4.1	-0.10%
Dow Jones	32,120.28	+191.66	+0.60%
S&P 500	3,978.73	+37.25	+0.95%
Nasdaq	11,434.74	+170.29	+1.51%
S&P 500 VIX	28.37	-1.08	-3.67%
Dollar Index	102.130	+0.260	+0.26%

Crude Oil WTI	110.81	+0.07	+0.06%
Brent Oil	111.48	+0.01	+0.01%
Natural Gas	9.033	+0.049	+0.55%
Gold	1,851.96	+0.06	+0.00%
Silver	21.982	+0.005	+0.02%
Copper	4.2747	+0.0055	+0.13%
US Soybeans	1,679.50	-13.50	-0.80%

SPDR S&P 500	397.37	+3.48	+0.88%
iShares Russell 2000	178.73	+3.16	+1.80%
Invesco QQQ Trust	291.26	+4.02	+1.40%
Direxion Daily Junior Gold Miners Bull 2X Shares	53.34	-0.99	-1.82%
iShares Silver	20.34	-0.05	-0.25%
ProShares Ultra VIX Short-Term Futures	15.28	-0.47	-2.98%
ProShares UltraPro QQQ	27.98	+1.08	+4.01%

Apple	140.52	+0.16	+0.11%
Alphabet A	2,116.10	-3.30	-0.16%
Tesla	658.80	+30.64	+4.88%
Amazon.com	2,135.50	+53.50	+2.57%
Netflix	187.83	+7.49	+4.15%
Meta Platforms	183.83	+2.55	+1.41%
Bank of America	35.84	+0.19	+0.53%

	Interest Rates	Next Meeting
FED	1.00%	Jun 15, 2022
ECB	0.00%	Jun 09, 2022
BOE	1.00%	Jun 16, 2022
SNB	-0.75%	Jun 16, 2022
RBA	0.35%	Jun 07, 2022
BOC	1.00%	Jun 01, 2022
RBNZ	2.00%	May 25, 2022
BOJ	-0.10%	Jun 17, 2022
CBR	14.00%	Jun 10, 2022
RBI	4.00%	Jun 08, 2022
PBOC	3.70%
BCB	12.75%	Jun 15, 2022

Gold: A Stelar Picture

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