On the heels of continued volatility in the gold market, the Godfather of newsletter writers, 90-year old Richard Russell, put out a quick note on the fierce trading action in both gold and oil. The 60-year market veteran also included his thoughts on how this will impact the Fed’s key decision-making policy.
Russell: “The volatility in gold has succeeded in knocking almost all holders of gold out of their positions. There is currently a huge short position in gold, a short position that is becoming increasingly nervous. And a running of the shorts could be near at hand. I’m receiving buy signals from all associated gold items.
Oil has been crashing. The crash in oil is another indication of deflation. One thing is certain: the Fed will be putting off any thought of increasing rates, a situation that the stock market and gold both greet bullishly. The big picture – bullish for the US economy, bullish for the precious metals, and little chance of a Fed boost in interest rates. The big question: with oil crashing and deflation a possibility, will the Fed resort to QE4, or something akin to it?”
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