Dear Jerome Powell, Is Everything Under Control? Spotlight Gold And Silver

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Chart courtesy of BullionStar

Congratulations to silver bulls, copper bulls, gold bulls, S&P 500 bulls, Nasdaq bulls, Dow bulls, and US housing bulls?

Did I leave anything out?


Record High on Gold

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Chart courtesy of BullionStar


Gold’s Strongest Move In a Year Was When the Dollar Was Rising

Gold and the US dollar are not as inversely correlated as widely believed. Sometimes gold and the dollar move strongly in the same direction. Let’s discuss why.

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Gold and US Dollar charts courtesy of StockCharts.Com, annotations by Mish.

On April 11, 2024, I noted Gold’s Strongest Move In a Year Was When the Dollar Was Rising

Gold’s strongest move in over a year started in March with the US dollar index generally moving higher.


Gold vs the US Dollar

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Charts courtesy of Stockcharts.Com, annotations by Mish


Gold vs the US Dollar Synopsis

Contrary to widespread myth, gold is not a good US dollar hedge.

With the US dollar Index at 90, gold has been at $380, $1000, $1130, and $1900.

And there are times when gold and the dollar rise together.


When Does Gold Do Best?

In general, gold is a poor inflation hedge. The best example is gold fell from$850 to $250 per ounce with inflation every step of the way.

In the mid-to-late 1990s, everyone thought “The Maestro”, Alan Greenspan, had everything under control. In such periods, gold is among the worst assets to hold.

Gold is best viewed not as a hedge against inflation but a hedge against credit stress, stagflation, and faith in central banks.


Is Everything Under Control?

Hello Jerome Powell. Sorry for asking, but we need to know: Is everything under control?

It seems to me the distinct message from multiple markets is that things are not under control.

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Chart courtesy of TradingEconomics, annotations by Mish

For discussion, please see How are Gold, Climate Change, Bitcoin, and the Fed Related?

Mr. Powell, please comment on the above chart that I posted on March 7, 2024.

On April 5, I noted Millennials Rush to Buy $2,300 Gold Bars at Costco

Neither party will fix the deficits. Neither party will do anything about mounting debt. No one will do anything about anything because the political system is totally broken.” Mish

That’s the message of gold. Bitcoin advocates would say Bitcoin as well.

Looking for another place to buy gold from a reputable dearer?

Please give Bullion Star a look.

For proper disclosure, I do have an affiliate relationship. It does not affect the price you pay but it helps me a tiny bit. The above link contains my affiliate code. At Bullion Star, you can buy grams of gold and silver as well as ounces.

Faith in Central Banks

The market does not believe everything is under control.

Neither do I.


More By This Author:

Is China Dumping U.S. Treasuries And Buying Gold?
China Shock II Is Coming, The EU Will Be Hit Hard, Then The Us
Housing Starts Vs Completions Looks Ominous For The Economy

Disclaimer: The content on Mish's Global Economic Trend Analysis site is provided as general information only and should not be taken as investment advice. All site content, including ...

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