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Friday Commentary from Chris

Big Al
January 16, 2015

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Discussion
11 Comments
    LPG
    Jan 16, 2015 16:00 AM

    Totally agree with Chris re: re-examining premises for investments.
    I believe the current volatility implies that one has to be nimble and “open-minded” these days – more than usual I mean 🙂 .

    Due to my repeatedly written belief that crowded trades do not provide adequate risk-reward, I also agree w. Chris re: those betting against the Euro.
    To me, it’s like “Tic Toc Tic Toc” until the pendulum potentially swings in the other direction – potentially next week.

    For the same reason that I personally believe that the Euro is due to a reversal, I also continue to see any move in gold in the $1300 zone as a good opportunity to reduce exposure in my gold derivatives (options) and PM stocks (although I’ll do it on a case by case basis for stocks depending on technicals). And I will use any meaningful pop in the $1300 zone as an opportunity to do so.

    Over the past few days and vs. the USD, we’ve had:
    1) a little strengthening of the JPY
    2) a CHF spike
    and potentially next week (or shortly after) 3) and potential a reversal of the EUR.
    This COULD mark a halt in the USD/dollar index move up, and potentially halting gold’s recent move up as well.

    Just my 2cts.

    GL to all investing/trading.

    LPG

      Jan 16, 2015 16:53 AM

      Good thoughts, LPG. It will indeed be ironic if, for a while, a weaker US$ and pop in the euro really does cause gold to retreat for a spell. But after all, it would make sense, since the opposites have fueled at least some of the gold rise.

      Personally, I would expect/hope a pull back would take us to the breakout point in the $1240-$1250 range and regroup there…if you were to see that, it would be time to load up a bit more again.

    Jan 16, 2015 16:25 AM

    Jim Rickards @JamesGRickards · Jan 15
    Each downtick in EUR\USD is one less reason for #Draghi to do #QE. Devaluation=ease. Problem is this comes at #Fed´s expense. #CurrencyWars

    Jan 16, 2015 16:26 AM
    Jan 16, 2015 16:09 AM

    I am almost wondering if the surge in gold strength is in anticipation that the dollar will soon peak. It’s the only good reason I can think of why they are moving up together but also suggests that gold could really take off once the dollar hits its top….in other words, money has moved into gold ahead of the crowd. And if that’s the case then the inverse relationship between gold and USD should reassert itself with a reversal in the dollar/euro trade.