This is a new year with fresh opportunities to buy some things and short others. It’s a two way market. Anyone who has been sitting in Gold over the past 4 years is frustrated. If you’ve been in Gold the past 18 months, it must feel even worse. You could have pretty much bought anything else and done well: Stocks, Energy, Crypto. There is a lot of pent up pressure in the Gold market.
I’ve been in the camp that Gold has either been a stay away or a short. This has gone on for the past 18 months since our upside targets were hit. It’s worked out relatively well for a long time, particularly the stay away from piece of that. The opportunity costs of being involved in this space has been off the charts.
I have to weigh all of the evidence as it comes in and isolate only the best risk vs reward opportunities regardless of the direction. Based on the overwhelming amount of positive momentum in gold, other metals and mining stocks, combined with the recent breakouts in Canada and Australian stock markets, it’s hard for me to be bearish metals in general, precious or otherwise. Copper and other base metals continue to make new highs as well, but that’s nothing new.
Today I wanted to share with you what I thought is probably the most interesting, and bullish Gold chart I’ve seen. Here we’re looking at Gold priced in Emerging Markets Currencies. Rather than pricing Gold in traditional US Dollars, I always like to approach it from different angles to a get a better true value perspective. In this case I equally-weighted China, Mexico, South Korea, Turkey, India, Russia, Brazil and South Africa and used this basket as the denominator: [Read more…]