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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Maurice Winn who wrote (160578)

8/6/2020 12:35:50 AM

From: TobagoJack

1 Recommendation

Recommended By
marcher

Respond to of 217620

Something about gold ... might have a 30% drawdown, and if so, best get on board as and when and if ...

In the meantime am unsure why the author chose to use a chart spanning months to make the point that gold beats S&P500

bloomberg.com

Gold Will Beat U.S. Stocks in Turbulent Market, Strategists Say

Gregor Stuart Hunter
August 5, 2020, 7:45 PM PDT
SocGen sees lockdowns, worsened economy breaking correlation
Gold and U.S. stocks could part ways during a fresh round of market turbulence, ending a three-month period in which their returns were almost yoked.

Renewed deterioration of the global economy and more lockdowns to prevent Covid-19 from spreading should hit equities but leave gold standing, according to Societe Generale.

“While the correlation between gold and equities has turned unambiguously positive since the March lows in risk assets, another serious bout of risk aversion could cause the performances of equities and gold to diverge,” SocGen strategists including Jitesh Kumar wrote in a note dated Aug. 4, echoing comments from other strategists.

Betting against U.S. equity benchmarks has been a losing battle for months. Going long on a precious metal as it’s flashing overbought signals is a trade only for the bravest. Yet a strategy of underweighting the S&P 500 Index versus the yellow metal is gaining attention.

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Accommodative fiscal and monetary conditions will keep gold prices buoyant even if more lockdowns are ordered, SocGen’s strategists said. Jitters about higher corporate or capital-gains taxes in the event that Joe Biden wins the U.S. presidential contest might drive a wedge between the asset classes well before the November vote, the strategists said.

The outperformance of gold has become a lightening-rod for analysts who follow correlations.

“Both long-term and short-term investors are buying gold in unison,” analysts from BCA Research wrote in a report. “This kind of groupthink often leads to a correction in the affected asset.” But if the dollar rebounds and gold retreats, investors should buy the dip, they added.

Technical indicators point to gold’s rally having gone too far, with bullion’s 14-day relative strength index of about 88 currently deep within what many chartists call “overbought” territory.

Gold in the spot market rallied since mid-March as real interest rates fell below zero and investors sought alternative portfolio defenses to bonds. The metal’s almost 11% gain outpaced all other classes last month even as the S&P 500 rallied its best July performance in a decade, according to Bank of America.

“If economic conditions continue to deteriorate and the Fed is forced to seriously consider negative policy rates, the read-across could be negative for equities, especially via the financials channel,” SocGen strategists wrote. “It would be reasonable to expect dips in gold to be bought at the same time by investors in an increasingly uncertain environment.”

At the same time as gold has become more correlated with stocks, it has reprised its past inverse relationship to the U.S. dollar, which had faded earlier in the year.

Luca Paolini, chief strategist at Pictet Asset Management, said he is bearish on the greenback, citing weaker U.S. growth prospects, current-account and budget deficits widening to “worrying levels,” and the possibility of a less business-friendly government if President Donald Trump loses.

“But we remain overweight gold -- the most attractive defensive asset given liquidity-induced inflation risks, weaker U.S. dollar expectations, increased geopolitical risks and uncertainty of the pandemic,” he said.

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To: Maurice Winn who wrote (160578)	8/6/2020 3:01:26 AM
From: TobagoJack	Respond to of 217620

Assistant in HK just picked up my big coin and sent pic. I bought and paid back on 21 May 2019, and the price for the (special-enough) 2019-mintage kilo coin had embedded w/i a then hefty 40% premium over spot (usd 41,027 per kilo spot vs HKD 445,000 price at 7.75 fx rate). Delivery repeatedly delayed due to you-know-what (riots, more riots, Covid, more Covid) and now the then-cost is at 10% discount to now-spot, thanks to the Trump, the Fed, and the liquidity that may save the world, or not and requiring more of the same per ‘just one more round’. The 2020-mintage 1-kilo coin is today quoted at HKD 550,000 (usd 71,000) but unavailable per unobtainium, no estimated delivery time, and must be hunted down from other buyers. Forget about it for awhile. Nicely solid beer mug coaster. Goes well as almost-matching set of earlier-still consolation trophy prize, all courtesy of volatility, chaos, crisis, and the Central Banks. Yes, the market is not rational; thank goodness. Had the wagers been placed on carbon energy, would have been less exhilarating Assistant just picked up big coin and sent pic. I bought and paid back in 21 May 2019, and the price for the ‘special’ kilo coin had embedded w/i a hefty 40% premium over spot (usd 41,027 per kilo spot vs HKD 445,000 price at 7.75 fx rate). Delivery repeatedly delayed due to you-know-what (riots, more riots, Covid, more Covid) and now the then-cost has no is at 10% discount to now-spot. Magical. The 2020 1-kilo is quoted at HKD 550,000 (usd 71,000) but unavailable per unobtainium, and no delivery time, and must be hunted down from other buyers. Forget about it for awhile. Nice coaster. Goes well as almost-matching set of earlier-still trophy. Am however wondering whether a bet should be placed on natural gas. If the Democrats win, shale / fracking would be out, and ... well, too early to tell. No matter who wins November, should be GU________ I do not understand why pension funds ‘invest’ in bonds, and coincidentally the funds do not understand the gold investors. In the meantime rather than investing in gold, continuing to retire capital into snausages (savings) safe-place, permanently taken off of the table, for good-housekeeping. There may come that call of duty one day, a probably very messy day, when all hell breaks loose, TeoTwawKi beckons, Darkest Interregnum winks, and many may blink