Gold Knocks Six Times on the Ceiling

Gold put in a strong performance today with the St. Louis Fed president presenting a case for cutting rates.

St. Louis Fed president James Bullard helped light a fire under gold today, Yapping About Too Little Inflation and the Need for Rate Cuts.

Technically speaking, the $1350 to $1370 area has been one tough nut for gold to crack.

On a weekly chart, gold has failed in this area five or six times, depending on how one counts.

Gold a Hedge, But Against What?

Some view gold as an inflation hedge.

It isn't.

Gold is a hedge against the notion that the Fed has things under control.

Gold fell from $850 an ounce in 1980 to $262 an ounce in in 1999 with inflation every step of the way.

People believed Greenspan, the great "maestro" had everything under control. It was an illusion.

Faith in central banks is about to be tested again.

Mike "Mish" Shedlock

Comments (22)
No. 1-13
Seb
Seb

For god sakes why not own both gold and crypto. This is why I’m agnostic against specific markets. You would have missed the move from 200$ to 8000$ in the same time. Wouldn’t have even needed to take a HUGE risk for outsized gains. And then you cash out at a point you feel comfortable with. All the while holding physical gold as well!

cienfuegos
cienfuegos

Absolutely agree...own both.

shamrock
shamrock

It's not exactly knocking at $1350 again. If it does, sell and take the money.

shamrock
shamrock

The other funny thing, Gold has returned about 50% since 1980. The s&p with dividends reinvested is up 6,850% in that time frame. Sorry losers.

HubbaBuba
HubbaBuba

No matter what whom ever says [and even though as a stock analyst I did NOT really enamor gold it's hot button driver is getting towards negative real interest rates. Sure, it's a conjectural debate on Central Banks, but nothing stokes it's fire like no holding costs [on the horizon - like now]. And may I recommend silver for those late to the party. It's ratio Vs gold is off the long term charts down - and can uncoil strongly in some catchup.