As we kickoff another trading week, look at what is on a tear, plus gold and stock market euphoria.
Gold Attempting To Stabilize
January 19 (King World News) – Ole Hansen, Head of Commodity Strategy at Saxo Bank: Gold is still trying to stabilise following the latest sell-off with focus on Treasury Secretary nominee Janet Yellen’s comments on the dollar and stimulus when she testifies on Capitol Hill today. Gold bulls will be looking for comments that may pause the recent dollar and yield rise.
The impact of recent gold weakness was visible in the COT report covering the week to January 12. It found speculators had cut bullish gold bets by 31% to near the lowest since June 2019. With real yields back below –1%, the short-term outlook hinges on the dollar with gold facing resistance at $1855/oz while Monday’s drop to almost $1800/oz helped trigger a strong buying response…
To hear Sean Boyd discuss $3,000 gold and the big game-changer
for the gold market CLICK HERE OR ON THE IMAGE BELOW.
Panic And Euphoria
Peter Boockvar: Here is an update of the Citi Panic/Euphoria index where it literally is going off the chart. It was 1.83 last week and 1.28 in the week prior. This is an unprecedented level of enthusiasm in the history of this index but it will only matter when it matters.
Euphoria In Stocks Literally Off The Charts
Janet Yellen’s testimony begins today and it’s no surprise that she supports a large amount of government spending as she’s a Keynesian economist who believes in its effectiveness along with easy money. She’ll do her best to punt on the US dollar saying the market will dictate its level as if we’re accusing others of FX manipulation she can’t be seen as someone who wants to manipulate our own.
On the likely questions on the ever rising government debt, she spent her career at the Fed encouraging its accumulation via cheap money monetary policy so she’s directly complicit in it. Other than that, her Treasury position shouldn’t matter for the markets as she can’t pass legislation nor implement monetary policy.
A trading day after China reported a quicker than expected Q4 economic rebound led by the industrial side, copper is getting back about half of what it lost Friday and oil is bouncing too. On the agriculture side, now it’s wheat’s turn to rip higher and today it is up by 2.1% at the highest level since May 2014 after last week’s nearly 6% rally.
Wheat Is Ripping Higher
The 10 year inflation breakeven is 10 bps from the highest since August 2014. I remain bullish on commodities and have been for many months but it is now a bit more consensus.
To listen to Michael Oliver discuss the gold and silver takedown and his remarkable advice about what investors should expect next and more CLICK HERE OR ON THE IMAGE BELOW.
To listen to a brand new audio interview with Doug Casey CLICK HERE OR ON THE IMAGE BELOW.
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