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In This Upside-Down World Of Ours, Precious Metals Are Big Losers

By Tim KnightCommoditiesSep 23, 2021 12:31PM ET
www.investing.com/analysis/in-this-upsidedown-world-of-ours-precious-metals-are-big-losers-200602885
In This Upside-Down World Of Ours, Precious Metals Are Big Losers
By Tim Knight   |  Sep 23, 2021 12:31PM ET
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In this upside-down world of ours, the only asset class that is reliably not doing well is the one you would least expect: precious metals.

Seriously, if you took a time machine back to the year 2011, when gold was over $2,000 per ounce, and told them that the U.S. government was going to bring up another $10 trillion in debt, whoever you told would sell everything they had to buy all the gold and silver they could afford. And yet, incredibly, that would be just about the only money-losing asset they could muster.

As I type this, gold is down over $30 per ounce. For the past 13 months, gold has done nothing but fall.

SPDR® Gold Shares (NYSE:GLD):

Long-Term GLD Chart.
Long-Term GLD Chart.

Silver is no better. In fact, as a chart, it’s even worse. A few days ago, during the Monday zaniness, I stated that the one and only thing I bought was silver (by way of October call options). I sold them the very next day at a profit. I’m glad I didn’t stick around. Precious metals are not to be trusted.

Silver Chart.
Silver Chart.

The truly worrisome thing is that the long-term chart for gold is turning to mush. It isn’t wrecked yet, but by Jove, it certainly is looking flaccid. I have zoomed in on what should constitute a superb saucer pattern, acting as a bullish base. And yet, it’s been like nailing jelly to a tree:

Long-Term Gold Chart.
Long-Term Gold Chart.

Suffice it to say that my falling-out-of-love with gold, which took place a few months ago, seems to be, thus far, a pretty decent decision. And that’s a shame, because I was really hoping that gold would put the Fed in its place.

In This Upside-Down World Of Ours, Precious Metals Are Big Losers
 

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In This Upside-Down World Of Ours, Precious Metals Are Big Losers

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Comments (14)
Kashyap Patawari
Kashyap Patawari Sep 24, 2021 3:44AM ET
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Suddenly whole world is bearish on gold. They want people to move money from gold to stocks which are at life time high. Suddenly on big bankruptcy will come and gold will move and stocks will fall
hans gaaikema
hans gaaikema Sep 24, 2021 2:40AM ET
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all i see is a cup and handle all fundamental reasons to be bullish. keep faith in what you know is wright, dont get manipulated out of your longs.
Paolo Bertozzi
Paolo Bertozzi Sep 24, 2021 1:59AM ET
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If gold has not lose the status of ultimate wealth, that had for thousand years without interruption, it will go 5 10 20k . Considering comex and london level of manipulation I suppose they are doing everything they can to make ppl lose interest in pm. otherwise gold is a relic of the past... personally I think the first option
Ioannis Lazaridis
Ioannis Lazaridis Sep 23, 2021 11:25PM ET
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Hi Tim . Always appreciate more your longer articles were you display your thoughts with explicitly . You know better than all of us that the bond investors are those who can decisively move the gold's price. Your view on this matter will be highly appreciated. Thanks !
Jason Yost
Jason Yost Sep 23, 2021 7:33PM ET
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How many times has JPM had traders arrested for spoofing? Didn't they just pay a paltry sum over 15M for spoofing? We need to treat market manipulation of this magnitude with capital punishment. Plain and simple.
Jokers R Us
Jokers R Us Sep 23, 2021 7:33PM ET
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the traders were the fall guys, they were on orders from the higher ups.
Rosh Jardine
RoshJardine Sep 23, 2021 7:18PM ET
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It still serves its best purpose as portfolio hedge..most traders overlook the exchange rate when making their entries in gold trade..manipulated true, but the Fed must protect non US resident investors especially in different sessions from other greedy market manipulators
Walter Jeffries
Walter Jeffries Sep 23, 2021 7:05PM ET
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It's manipulated pure and simple. That's also a blessing, because you can cheaply load up on physical before the day (likely not too far away now, but still could be years) when all the Fed's worthless paper goes up in flames.
Doug Wildman
Doug Wildman Sep 23, 2021 5:30PM ET
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I have about 20% of my portfolio in gold and consider it a long term hedge against poor fiscal policy.
Jokers R Us
Jokers R Us Sep 23, 2021 5:30PM ET
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I don't see that investment paying off until the dollar loses it's reserve currency status.
Allatra Yiveh
AllatraYiveh Sep 23, 2021 4:52PM ET
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A worse than expected PMI and increase in unemployment claim caused gold to be smashed continuously until end of trading session. Where is the logic? The only logical explanation is gold price is just a paper gold price that is dictated mostly by trading algos from Banksters. The price goes wherever the banksters want it.
Carl Olsson
Carl Olsson Sep 23, 2021 3:34PM ET
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The market only look at nominal rates going up and sell gold. Apparently the market has never heard about the concept of real rates.  In the meantime short gold and buy physical metal with some of the profits.
William Plotts
William Plotts Sep 23, 2021 2:56PM ET
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Dont fell bad Tim I bought Si back in Feb , Im down 35,000 in it
Go North
Go North Sep 23, 2021 2:38PM ET
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👍👍
Petru Zogo
Petru Zogo Sep 23, 2021 1:05PM ET
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It's only manipulation from FED
Todd Holaday
Todd Holaday Sep 23, 2021 1:00PM ET
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Im still hanging in but have similar frustrations. I like the “nailing jelly to a tree” phrase, hope to find an opportunti to use it. Why one would try that i dont know but its quite a visual.
 
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