Gold: You Call That a Dip?

 via  GoldinAmerica.com

 

 

Chart: SPX red line:: gold is candle. 

You call that a dip?

UPDATE: What happened today? Weren’t we supposed to selloff on a strong CPI number? 

Dips may be harder to come by in this new regimeof fed indecisiveness.Up $5 may soon become the dip to buy..

For now, look for $1350 to be an option related magnet. If it breaks free from that, $1400 shouldn’t be a problem. 

February 14, 2018

Fed Must Chase Inflation- Gold is a Buy

Written by guest contributor Vince Lanci

Cover photo: SPX vs Gold Daily.

CPI is strong today at 0.5 on expectations of 0.2
This makes the Fed more likely to raise rates. Per my interview with Daniela Cambone on Kitco to be posted later.

 

Sell the Rate Hike Rumor if You Must, But Buy the Hike News

When news comes out to justify interest rate hikes like CPI today.. gold and stocks will (should) sell off.

When (if) the rate hike actually comes.. Gold will be more likely to rally as the fed must lag inflation keeping real rates close to zero or negative to prop stocks.

H/T @CharlieBilello and  Pension Partners

 

And the unintended consequences of Gold rallying as the Fed attempts to orchestrate an orderly low volatility type of descent in stocks will become obvious.

Gold traders should consider selling Gold and stocks on the data. And buy Gold on the actual hike in rates.
Welcome to the 1970s.

“Buy the Dip” is no longer exclusive to stocks. It may soon become Gold’s mantra

Good Luck

VBL

vlanci@echobay.com

Vince has 27 years’ experience trading Commodity Derivatives. Retired from active trading in 2008, Vince now manages personal investments through his Echobay entity. He advises natural resource firms on market risk. Over the years, his expertise and testimony have been requested in energy, precious metals, and derivative fraud cases. Lanci is known for his passion in identifying unfairness in market structure and uneven playing fields. He is a frequent contributor to Zerohedge and Marketslant on such topics. Vince contributes to Bloomberg and Reuters finance articles as well. He continues to lead the Soren K. Group of writers on Marketslant.

Comments

Vince Lanci GeezerGeek Wed, 02/14/2018 - 12:07 Permalink

Depends. If you want to keep your liquid assets 70% in equity.. then when rebalancing (every 2 years or so) take profits off table in stocks and put some in gold. 5-10% assets is plenty as fiat buying power hedge. 

Do not expect to monetize your home when inflation comes this time. No way the banks  give you equity loans to live off of after their deflationary debacle. 

Fwiw

 

In reply to by GeezerGeek

JibjeResearch Wed, 02/14/2018 - 12:04 Permalink

Coins to have long term:

BTC,BCH,BTG,BCD,LTC,ETH,BCA

 

If you have BTC, go claim your BCA.

By this Sunday, if you have LTC, you will get LTC Cash.

 

Hurrayyyyyyyyyy..... Cryptosians.  Now, add all your new wealth.

AlphaSeraph Wed, 02/14/2018 - 12:22 Permalink

Look at the last rate hike - gold went UP. It's simple, there's so much debt and the CB's are the ones propping up the Treasury market, the "safe haven" market. When rates go up and Treasury prices struggle due to some Fed selling + higher rates, where are the safe haven seekers going to go? Gold.

If the Fed raises rates you might see an emotional sell off in gold but my guess is it lasts no more than a day (and based on paper contracts not the real stuff). Then watch the next month as gold drifts higher and higher into the 1400-1450 range.

If the UST market hurts, gold goes up. It's not hard to figure out why the December hike lifted gold prices.