Gold is surging again before the most important economic data in quite some time is released today, the jobs report. Should we get a much hotter than expected number, the fed will be emboldened to raise rates.
The yellow metal is up about 1%.
The junior miner ETF, GDX, is up 1.2% in the pre market. It has been a stellar performer in 2016, higher by 44%.
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And nobody owns it
They won’t to move in March with FED fund Futures at less than 50% chance of hike
*dare
Bought GLD 109 calls on Dec 23. Sold them Jan 20th, when I saw a bottom in stocks and decided to buy them instead. It was an either or decision, as it typically is for gold vs stocks.
My reasoning was “If GC can’t rally through this horrible January filled with uncertainty, then I am wrong that GC will turn a corner this year, or at least not yet.”
If I had not sold I would have made my money 18X over, assuming I held until now, which I definitely would not have.
We all have these stories and there is nothing special about mine. It’s cathartic to share, and even more cathartic to now bet against gold which I am doing for two reasons. The first, most important, and dumbest reason is spite. The second reason is mean reversion, an increasing likelihood there is no recession, and that extreme bear markets like the one GC has been trapped in do not die with a pretty little ice-cream scooper bottom. There is havoc and a sharp, deep V.
There may not be a hike in March or April, but there certainly will be another hike this year and the table will be set for this well in advance. Stocks may not do well, but they won’t collapse. This isn’t 2008. Gold will absolutely collapse if the markets regain confidence that they can withstand another hike or two. Strong-ish stocks + rising dollar means death for gold. Considering the start to the year we’ve had, filled with absolute fear and panic, I don’t think that’s impossible.
I guess what I’m trying to say is let’s Make America Great Again…
I’m getting killed to the tune of 40% in my trading portfolio by shorting gold all in and leveraged.