Jul 19, 2018

Gold, Gold Stocks and Inflation

The price of gold is falling, this is the new low for the price of gold this year. Gold stocks are continuing to hold up very well in the face of the decline in the price of gold. Gold stocks are not making a new low for the year at least not yet and though they are down today they are not down nearly as much as you would assume with a 10-12 dollar drop in the price of gold. 

I still think that traders have this wrong. They're still looking at the the trade war as somehow being dollar positive. It's dollar negative. That is impacting gold. 

They are dismissing the increasing inflation numbers that we're getting as transitory because they think the Fed is gonna hike rates more to fight the inflation which is going to be good for the US Dollar and bad for Gold. 

The reality is they're not gonna fight the inflation they're gonna surrender. Inflation is going to win because if they fight inflation they cause the worst financial crisis since 2008 and they don't want to do that.