With many people wondering what’s next for gold, Bill Fleckenstein addressed the crowded small speculator long trade in the gold market.
By Bill Fleckenstein President Of Fleckenstein Capital
March 1 (King World News) – Overnight markets were slightly higher, with China gaining a couple of percent on the reserve requirements cut.
In a King World News interview I spoke with the man who predicted the Swiss National Bank would experience staggering losses and that the Fed would also experience massive losses that will destabilize the global financial system! His company is the only one in the world offering a precious metals investment service outside the banking system, with direct ownership and full control by the investor. He has also become legendary for his predictions on QE, historic moves in currencies, and major global events. To find out what he and his company can do to help answer that age old question for you CLICK HERE.
Bill Fleckenstein continues: Stronger world markets helped boost the SPOOs overnight, but about half an hour into the session they really blasted off, for no apparent reason, though it was coincident with the ISM data registering 49.5 versus expectations of 48.5. I don’t think people were too concerned about this, and with anything less than 50 meant to be bad news I have a hard time chalking that up as the reason for the rally, so I really have no decent explanation for it except perhaps it was beginning-of-the-month fund flows.
Out With the Ramp, In With the Rally
It seems sort of lame to blame market moves on both end-of-the-month markups and beginning-of-the-month fund flows, but after seeing the market bolt 1% higher on the back of essentially nothing, it’s the best I can do.
In any case, from there they climbed some with the market on fire, as it closed up 2.5%, and was even stronger beneath the surface. Away from stocks, green paper was stronger today against the yen, but mixed against most everything else. Oil was flattish, fixed income was heavy, with the long end particularly so, and the precious metals slumped in New York after being higher overnight, with silver losing 1% to gold’s 0.5%. The miners were disproportionately weak, after behaving particularly well lately, though I’m not sure there’s any real information in that.
Included below are three questions and answers from the Q&A’s with Bill Fleckenstein.
What About The Small Spec Long Trade In The Gold Market?
Question: Bill, how much credence do you give to sentiment indicators regarding gold. It seems that small specs are very bullish again and that has often foretold a top? This rally has been straight up but I am more inclined to think that we have seen a real change in thinking re the central banks and this time really is different. After all, the stock markets have seen this sort of excess sentiment for five years now. What is your view?
Answer from Fleck: “You have to look at the whole picture and can’t try to be too cute… I think people are still worried about that the price is still headed much lower and are afraid of their shadow. I think the price is headed much higher and it will take much more lopsided sentiment, etc. to get me to really trade anything.”
Question: Fleck- I got an invite from Schwab for an online web forum:
At this live, online event you can learn from our featured guest Alan Greenspan, former Chairman of the Federal Reserve System and financial rockstar, in a moderated conversation with Schwab’s….Financial rockstar? I guess they haven’t read your book.
Answer from Fleck: “Lol, exactly.”
Question: On inflation, the Fed has an upcoming problem and one that I’ve talked about for many months now. Services inflation has been obvious in CPI but masked within the PCE inflation gauge due to the different mix in the components. Well, inflation in the former is now more showing up in the latter. Core PCE rose 1.7% y/o/y, two tenths more than expected and at the fastest pace since December 2012. Yes, about a 3 yr high in PCE core inflation, the preferred measure of the Fed and while we hear everyday talk from Fed officials about worries about low inflation. Deflation remains solely in the goods and commodities space but as we continue to recycle out the sharp drop in energy prices, headline PCE rose 1.3% y/o/y, about double the .7% pace in December and the most since October 2014.
Answer from Fleck: “Stagflation is basically what we have been living through, but no one calls it that.”
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***KWN has now released the Stephen Leeb KWN audio interview where he discusses the gold and silver, China, Russia, what surprises to expect in 2016, and much, and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
***ALSO RELEASED: Glencore CEO’s Comments And What It Means For Gold, Silver And Commodities CLICK HERE.
***KWN has also now released the Dr. Paul Craig Roberts KWN audio interview where he discusses the gold and silver market in greater detail. Dr. Roberts also discusses the greatest threat facing the world, systemic collapse, major markets, and much more, and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
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