On the heels of the Dow falling nearly 160 points, today one of the greats in the business sent King World News a fantastic piece about today’s wild trading action and what he’s watching in the gold market.
December 2 (King World News) – Overnight markets were flattish and the early going here saw the Dow and S&P take a small dip into negative territory while the Nasdaq stayed positive. The Nasdaq then tried to ramp higher during a speech by Janet Yellen (though I have no idea why), but that didn’t work and by early afternoon the indices had lost 0.75%. By day’s end the indices were about 1% lower (though the Nasdaq declined less)…
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Away from stocks, green paper was once again the flavor of the day, and oil lost about 4%, as the OPEC meeting yielded little (no shock there). Fixed income was slightly weaker and the metals lost more than 1% apiece into the Yellen speech, which is where they closed.
Bulls Are Right At Home for the Holidays
There isn’t a whole lot new to say about any market right now, as they are all just basically trading on end-of-the-year dynamics and speculation about what the consequences of the Fed meeting will be. Perhaps there won’t be anything definitive until we get past the FOMC communique, though obviously something unscripted could come along at anytime.
Included below are three questions and answers from today’s Q&A with Bill Fleckenstein. The questions are from his subscribers and they get to read Fleckenstein’s answers every day.
Question: Bill, are we now in a new Goldilocks, similar to what we saw from 2012 to 2014, but new now in the sense that the Fed will, in the market’s view, raise rates gradually and in a “just right” way? I am sure you don’t believe they can do that (neither can I) but now that the Fed has ended QE and is about to raise rates and with the equity markets still at their all time highs, my question is whether gold is now in the penalty box for many more months at least until it is proven that the Fed can’t raise rates very gradually like this? And isn’t it a very (further) long term problem for us precious metal holders, since with such slow and gradual increases it may be a very long time before the market does have a fit over this? Thanks so much, as always, for all of the advice and help.
Answer from Fleck: “The FOMC meeting is two weeks away. It won’t take long after that before bad data starts to make the Fed look foolish. Gold has already had over a year to discount this tiny hike. I think you are borrowing trouble.”
Question: Hi Bill, this inclusion of the Yuan in the IMF currency basket has to be $USD negative, therefore gold positive to more than an incremental degree and particularly over time, no?
Answer from Fleck: “Maybe, to some degree. I don’t think it is a big deal right now though.”
Question: Bill, Us PM holders continue to suffer. Gold seems totally dead, and the price is set by a bunch of paper pushers on the Comex. Not, apparently, by real demand for physical. I can’t understand this. What would be your reaction to this quote?
“World and USA have lots of problems but those problems are not going to abruptly immanently crash the financial and economic systems and therefore the juice-up for gold is gone. World and USA will struggle, not collapse. Most people will invest to provide income, not pre-position their savings in no-interest-paying declining-price gold to wait for infinitely prophesized but never coming apocalypse. THAT is reality.”
Answer from Fleck: “It is just jibberish. It starts from a random premise, which someone made up (as if that is the one and only reason why gold would go up), and leads to the conclusion that person wanted. Why read stuff like this? Here is a quote that I stole from someone else that may help you:
“Just because some jackass asserts a thing does not mean that it is worthy of refutation. If the same guy tells you that every space shuttle launch perturbs the Earth’s orbit, and that the cumulative effects are just about to start the process of the loss of the atmosphere into space, thus creating a vacuum that will destroy all life on the planet in approximately 36 hours, would you deem this necessary to refute? How much time would you spend explaining to him why this cannot happen? Would not your time be spent better doing other things? And if you devise a concise explanation, why would you assume he would understand?”
Fleck adds: “Amen to that.”
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***ALSO JUST RELEASED: Gerald Celente – Forget The Lies, Things Are Far Worse Than What The Public Is Being Told CLICK HERE.
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