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Gold's Countertrend Rally Is Losing Steam

Published 11/07/2016, 08:18 AM
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My theme late has been “bearish precious metals, bearish equities, bullish US dollar.” Two of those three are going well right now, and I suspect equities will shake off the Clinton Ecstasy in short order when they realize what horrors lay ahead.

As for gold, I’m short SPDR Gold Shares (NYSE:GLD) and VanEck Vectors Junior Gold Miners (NYSE:GDXJ) (the junior miners). My belief that gold’s countertrend rally would poop out around $1300 seems to have come through.

Gold Chart

Latest comments

"SPDR Gold Shares". . Speaking of this fund, can anyone explain why there is a clause in the GLD prospectus that states GLD has no right to audit subcustodial gold holdings? This means there is a glaring audit loophole within GLD. Why would the GLD organizations create such an audit loophole? I have yet to hear any reasonable justification for the existence of this loophole. On top of that, the GLD organizations famously promise that GLD is completely backed by actual physical gold but yet they will not give retail investors access to any of their mysterious gold holdings. . . CNBC's Bob Pisani also made a highly publicized visit to GLD's gold vault in a segment called Gold Rush: The Mother Lode. GLD's administration organized this visit to show that GLD's gold actually exists. However, the gold bar held up by Mr. Pisani showed a serial number of ZJ6752 which did not show up on the latest bar list during that time. It was later found that this "GLD" bar actually belonged to ETF Securities.
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