With the recent pullback in gold back down to 1200, are you a buyer of gold here? Please vote in our poll below:
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Joined Jan 27, 2008
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I was a buyer of April GLD puts at 1210 yesterday morning.
As a buyer of March GLD 109 calls back in late Dec, and a seller of said calls in mid Jan, I hope this purchase is as prescient and that my will might be a touch stronger this go round.
you’re going to need USD strength to push Gold back lower
Not true.
You just need a restoration of “normalcy.”
The only thing that gold bulls are hanging onto is just that: “Well, we know the Fed will relent and that means a lower dollar which means gold gets a boost.” That is the only idea that has kept it above $1200, and that idea will soon fail.
The dollar has been going up since 2011 and gold has been going down since 2011.
Gold needs turmoil to stay above $1200.
I mean when was the last time that Fed easing didn’t crush gold, let alone helped it?
I dont think you understand what drives the gold price action.
The Fed is weakening the USD by hinting about pushing back the rate hike. USD (was) pricing in 3 to 5 rate hikes in 2016. Now it’s repricing lower as it’s not at all likely 3 to 5 hikes hikes will happen in 2016 anymore.
Gold is not just an inflation hedge. It’s a relative carry trade and should be analyzed like it is a currency. As the Fed has been hinting of “tapering QE”, ending QE, raising rates, the USD began pricing in the new relative strength. Relative to gold and other FX pair’s it’s done quite well.
BUT. Now we find ourselves faced with the Fed trying to talk down the USD by implying they’re going to be more cautious about raising rates i.e. pushing march rate hike back, ergo. less hikes in 2016 than earlier anticipated.
The carry between Gold & USD goes back up and that’s why gold has rallied.
You need stronger Dollar for Gold to go back down. It’s a fact.
the carry between gold and usd??? lol. what is gold’s interest rate?
anyway, take what you just said and reexplain it within the context of the dollar exploding higher since summer 2014 and gold dropping over that time.
what on earth are you talking about?
Gold doesn’t have an interest rate but it has a relative return vs. the Dollar; as well as, a cost to carry (hence the gold comex futures curve).
Fed Tightening = USD strength.
Last time I checked, the Fed started Tapering QE Feb. 2014. Yes, because of that, the dollar began exploding higher.
The whole point is that USD vs. Gold have had an inverse relationship and that fact is still true today. You said it yourself “dollar exploding higher since summer 2014 and gold dropping over that time”
zuul – a quick google search of “contango” “commodity futures prices” and “eurodollar swap curve” may help you understand this.
you are the reason i win
Haha good luck. I keep tight stops.
probucks is correct