Best of the Week
Most Popular
1. 2019 From A Fourth Turning Perspective - James_Quinn
2.Beware the Young Stocks Bear Market! - Zeal_LLC
3.Safe Havens are Surging. What this Means for Stocks 2019 - Troy_Bombardia
4.Most Popular Financial Markets Analysis of 2018 - Trump and BrExit Chaos Dominate - Nadeem_Walayat
5.January 2019 Financial Markets Analysis and Forecasts - Nadeem_Walayat
6.Silver Price Trend Analysis 2019 - Nadeem_Walayat
7.Why 90% of Traders Lose - Nadeem_Walayat
8.What to do With Your Money in a Stocks Bear Market - Stephen_McBride
9.Stock Market What to Expect in the First 3~5 Months of 2019 - Chris_Vermeulen
10.China, Global Economy has Tipped over: The Surging Dollar and the Rallying Yen - FXCOT
Last 7 days
A Message to the Gold Bulls: Relying on the CoT Gives You A False Sense of Security - 20th Mar 19
The Secret to Funding a Green New Deal - 20th Mar 19
Vietnam, Part I: Colonialism and National Liberation - 20th Mar 19
Will the Fed Cut its Interest Rate Forecast, Pushing Gold Higher? - 20th Mar 19
Dow Jones Stock Market Topping Pattern - 20th Mar 19
Gold Stocks Outperform Gold but Not Stocks - 20th Mar 19
Here’s What You’re Not Hearing About the US - China Trade War - 20th Mar 19
US Overdosing on Debt - 19th Mar 19
Looking at the Economic Winter Season Ahead - 19th Mar 19
Will the Stock Market Crash Like 1937? - 19th Mar 19
Stock Market VIX Volaility Analysis - 19th Mar 19
FREE Access to Stock and Finanacial Markets Trading Analysis Worth $1229! - 19th Mar 19
US Stock Markets Price Anomaly Setup Continues - 19th Mar 19
Gold Price Confirmation of the Warning - 18th Mar 19
Split Stock Market Warning - 18th Mar 19
Stock Market Trend Analysis 2019 - Video - 18th Mar 19
Best Precious Metals Investment and Trades for 2019 - 18th Mar 19
Hurdles for Gold Stocks - 18th Mar 19
Pento: Coming QE & Low Rates Will Be ‘Rocket Fuel for Gold’ - 18th Mar 19
"This is for Tommy Robinson" Shouts Knife Wielding White Supremacist Terrorist in London - 18th Mar 19
This Is How You Create the Biggest Credit Bubble in History - 17th Mar 19
Crude Oil Bulls - For Whom the Bell Tolls - 17th Mar 19
Gold Mining Stocks Fundamentals - 17th Mar 19
Why Buy a Land Rover - Range Rover vs Huge Tree Branch Falling on its Roof - 17th Mar 19
UKIP Urged to Change Name to BNP 2.0 So BrExit Party Can Fight a 2nd EU Referendum - 17th Mar 19
Tommy Robinson Looks Set to Become New UKIP Leader - 16th Mar 19
Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - 16th Mar 19
Towards the End of a Stocks Bull Market, Short term Timing Becomes Difficult - 16th Mar 19
UKIP Brexit Facebook Groups Reveling in the New Zealand Terror Attacks Blaming Muslim Victims - 16th Mar 19
Gold – US Dollar vs US Dollar Index - 16th Mar 19
Islamophobic Hate Preachers Tommy Robinson and Katie Hopkins have Killed UKIP and Brexit - 16th Mar 19
Countdown to The Precious Metals Gold and Silver Breakout Rally - 15th Mar 19
Shale Oil Splutters: Brent on Track for $70 Target $100 in 2020 - 15th Mar 19
Setting up a Business Just Got Easier - 15th Mar 19
Stock Market Elliott Wave Analysis Trend Forercast - Video - 15th Mar 19
Gold Warning - Here Are the Stunning Implications of Plunging Gold Price - Part 1 - 15th Mar 19
UK Weather SHOCK - Trees Dropping Branches onto Cars in Stormy Winds - Sheffield - 15th Mar 19
Best Time to Trade Forex - 15th Mar 19
Why the Green New Deal Will Send Uranium Price Through the Roof - 14th Mar 19
S&P 500's New Medium-Term High, but Will Stock Market Uptrend Continue? - 14th Mar 19
US Conservatism - 14th Mar 19
Gold in the Age of High-speed Electronic Trading - 14th Mar 19
Britain's Demographic Time Bomb Has Gone Off! - 14th Mar 19
Why Walmart Will Crush Amazon - 14th Mar 19
2019 Economic Predictions - 14th Mar 19
Tax Avoidance Bills Sent to Thousands of Workers - 14th Mar 19

Market Oracle FREE Newsletter

Stock Market Trend Forecast March to September 2019

What Gold Is Not

Commodities / Gold and Silver 2018 Aug 17, 2018 - 03:17 PM GMT

By: Gary_Tanashian

Commodities

I was reading a post by Martin Armstrong called…

Gold and the Changing Fundamentals

…and in it he published a question from an email sent by a reader:

“Mr. Armstrong; You are obviously the person worth listening to when it comes to gold. Every fundamental these people have argued to support gold has proven completely false. Confusion in gold is really very high. You have to be really stupid at this point to listen to this nonsense. Can you express any opinion on gold?”


“These people” the emailer is talking about are obviously the gold “community” at large and the “gold analyst” (ha ha ha, gold analyst; hi, I am a gold analyst; I analyze a piece of rock that does nothing whatsoever) community in particular. First of all, anyone who belongs to a community is already implicitly sworn in as biased. Secondly, a gold analyst is just another term for gold-obsessed idealist who really wants you to be obsessed with it too.

Don’t get me wrong. There are a lot of market and gold mining analysts very much worth their salt. Within a market analyst’s analysis there is gold analysis, just as there is tin, hogs, corn and global equities analysis. Within a mining analyst’s work is the ability to help us pick real companies in which to invest and avoid the plentiful scams out there. I have two who I trust through our long-term relationships; Inca Kola News (IKN) and a personal contact who is not public (although I think he should be). You should either do intensive fundamental work or have access to reputable sources for it.

But the surest way to spot one of the promoters that Marty often rails about is their singular, dogmatic focus on a piece of metal that pays no dividend, is no one’s liability and basically does nothing. There is literally a world of other assets and markets orbiting around the shiny rock in the middle, which does nothing other than get marked up in times of monetary and systemic anxiety and marked down when all’s seemingly just swell.

Armstrong goes on to talk about how the younger generation is going to go digital and kick gold to the curb (that’s debatable, Marty) and that gold will go opposite the US dollar (most often yes, but not always). He then talks about the real question surrounding gold…

The real issue is not whether gold is money, silver, copper, bronze, seashells, sheepskins or cattle.  The real question is will money be COMMODITY based (Tangible) with its roots in barter or will it be simply a representative of economic output that can be electronic? That is the real question. Are we headed into a future as in Star Trek where physical money is obsolete?

Well, I am not ready to board the Starship Enterprise just yet, but I will say that over the years (even well before gold entered its bear market) I have either poked fun at or aimed bile at those promoting…

  1. Gold as a war and terror safe haven: When gold spikes due to war or terror knee jerk reactions, buying it at that time is the surest way to incur a short-term loss on your position when the hype dies down in a day or two.
  2. Gold as real money: It is not; paper currency is real money because governments – faulty and debt addled as they are – say it is. Gold is a long-term hedge against these ill-fated monetary regimes.
  3. Gold as the best hedge against inflation during times when an inflated economy is growing and seems healthy to a majority: Ah, no. When the public perceives there to be a problem with the inflation, then sure. But since 2011 inflation by monetary policy has gone right to stocks and more recently, inflation by fiscal policy has helped the US economy. And so I ask you, where’s gold currently trading again?
  4. Demand from India and China will overwhelm the efforts of manipulative western entities to suppress the gold price: I ask you again, where is gold currently trading? For every eastern buyer there is a seller, whether western or otherwise. A buy/sell transaction is a zero sum game and would have little effect on the price from a supply/demand standpoint in and of itself. Demand has obviously not been there relative to supply.
  5. People obsessing upon the Commitments of Traders data looking for evil and manipulative intent with regard to gold and silver: Cue the well-followed technology and gold “expert” (as he was first introduced to me a few years ago), on Twitter recently railing against “short attacks” on gold by large speculators. What is actually happening is that the Specs were too net long and those “attacks” he sees are actually redemptions and mass pukage by these not so evil Specs (click chart for source).

The gold “community” always wants you to have a solid reason for events other than ‘well, looks like we screwed up… again’.

The way to start not screwing up is to drop all the wrong headed stuff that has not worked for basically ever, and start using what does work. That would be something along the lines of say… I know, the Macrocosm. The big 4 are right there. Gold vs. the stock market, economic contraction, Yield Spreads (i.e. Yield Curve stops flattening and/or begins to steepen) and by extension, declining confidence.

It’s not rocket science (nor the Starship Enterprise for that matter), but so many people have been pre-programmed by other people who have pretended for too long to be experts on something so simple it appears complex to the average person.

Gold is an anchor. That anchor digs into a sea bed of stability as the tides go in and out. But if you’re playing gold as a play in the casino, well you get what you deserve. The average gold-obsessed analyst assists casino patrons as they throw the dice and hope that whatever rationale comes up will be the winner. But it ain’t “Chindia Love” or inflationary economic growth that are going to do it, especially for the gold miners, which would leverage gold’s standing vs. cyclical assets.

So with the gold sector in some stage of capitulation and approaching NFTRH‘s current downside targets, it’s best to remember why you may or may not be interested in buying. It’s already been proven, time and again, that it is not for the standard reasons that the “community” * pitches to you. We are setting up for a potentially epic opportunity… but only if the right analytical parameters come into play would it be an intense and extended affair.

* I put that word in quotes because it was actually used repeatedly by Mr. Gold when writing to his CIGA (comrades in golden arms). I mean, they even nickname themselves as some sort of team or unit. What better giveaway to bias could you imagine?

Subscribe to NFTRH Premium (monthly at USD $33.50 or a 14% discounted yearly at USD $345.00) for an in-depth weekly market report, interim market updates and NFTRH+ chart and trade setup ideas. You can also keep up to date with plenty of actionable public content at NFTRH.com by using the email form on the right sidebar. Or follow via Twitter ;@BiiwiiNFTRH, StockTwits or RSS. Also check out the quality market writers at Biiwii.com.

By Gary Tanashian

http://biiwii.com

© 2018 Copyright  Gary Tanashian - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Gary Tanashian Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules