I’m not a fan of the yellow metal, mainly because its a wild underperformer and is loved by bedlamites everywhere. But, I’d be remiss, almost irresponsible, if I didn’t point out how well its performed during 2016–amidst all of the tumult and calamity.
If you must play it, go with the commodity itself, via GLD or an ETF that holds a basket, like GDX. Or, if you insist, try the larger capped names. Here is the gold sector, sorted. By cap, in Exodus.
Bottom line: As soon as stocks bounce, gold will be kicked into the streets. It is NOT an ark. It is a pretend ark, made from weaker woods, luring scared people onto its vessel–dooming them from existence. Nevertheless, and whether I like it or not, gold has been a safe haven, up 4% as a group for the year–the only sector in the black alongside silver and gas utilities.
If you enjoy the content at iBankCoin, please follow us on Twitter
Gold is nearing it’s 200DMA [1132]. Every time gold tries to get and stay above the 200DMA it gets laughed off the stage and craters to new lows. This time is not different. The stage is set to humiliate gold once again.
In my opinion only a falling dollar will save oil and in turn save stocks. Falling dollars are great for gold. Assuming dollars start falling, which is more important to the buyers of the barbarous relic: a risk off environment or a weaker dollar and lower rates?
My bet is that a risk on environment annihilates gold again and those who buy based on the weaker dollar premise are forced to sell at the lows.
The reason being: we should all know by now that a weaker dollar will not stoke any real inflation.