Haven't had a lot to say lately. A bit too much holiday cheer perhaps. And duck. Lots of duck.
How do you sail a boat against the wind? You tack.
How do you get gold and the US dollar to rise together? Same thing. There's a lot of zigging and zagging, but the overall trend goes in a direction that seems impossible.
In the figure above, I used the last London fix, which was actually on Tuesday. This is the methodology I have been using all along. If I had used Friday's price, the last point would have been farther to the right.
If I'm right that this trend is signalling deflation, then we just have to wait and see what the Fed does in the New Year. Until then, champagne all around!
How do you sail a boat against the wind? You tack.
How do you get gold and the US dollar to rise together? Same thing. There's a lot of zigging and zagging, but the overall trend goes in a direction that seems impossible.
In the figure above, I used the last London fix, which was actually on Tuesday. This is the methodology I have been using all along. If I had used Friday's price, the last point would have been farther to the right.
If I'm right that this trend is signalling deflation, then we just have to wait and see what the Fed does in the New Year. Until then, champagne all around!
Gold has broken out to the upside against CHF, GBP and EUR.
ReplyDeleteIf a lot of people were long-USD-short-gold, or even long-Nikkei-short-gold if you believe Zerohedge, then that boat is listing too far to one side right now.
Why can gold go up in USD? Because USD is no more than the currency that gold is quoted in. And gold spent the past 2 years getting sold to 0 by the whole Western world, so the minute they start buying it all back the supply-demand function tilts back in gold's favour.
Don't stop believing! Hold on to that fe-ee-ling!
Only the size of my head.
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