Gold's Current Commodity Costume


Gold historically has (rarely) been broadly categorized as "overbought" vis-à-vis currency debasement, our arguing such case in price "having gotten ahead of itself" back in 2010-2011 as graphically depicted in the above millennium-to-date panel. Otherwise, its being disregarded and disrespected occurs when it's treated as a commodity, especially while the sinister stock market is fawned over as being, well, "Gold". Such seems the current state of these two mighty markets.

In last week's missive we used the phrase "This drives us bats" in citing Financial Media enthusiasm over stock market earnings beating estimates instead of beating prior period results, the latter being the case for just 60% of S&P 500 constituents thus far in Q4 Earnings Season. Now, the same phrase applies to Gold's being booted about as a commodity rather than being revered (not just as a currency but) as the currency. One wonders for how much longer the blind eye to both non-supportive earnings and Dollar debasement can be maintained. For from our perspective, the Great Halving of the S&P and Doubling of the Gold price is hurtling toward us like a freight train. 

Further, in musing over writing a book on it all going wrong, we sense it is  so close to so doing, it would occur in the midst of penning the tome. Were such circumstance morphed into one of those disaster films, the star would exclaim: "There's not enough time to warn the sheeple!" Dollar bills in people's pockets would start spontaneously combusting with the financial planet then bursting to bits, even as some TV knucklehead shrieks "It's a buy! It's a buy!" Don't laugh: it's coming to a theatre near you.

That said, Gold really is off to a lousy start for the year, while the S&P 500 garners yet another all-time high (3887), +3.5% in 2021. As we saw a week ago in our BEGOS Market Standings, Gold remains the worst of the bunch, now -4.5% in settling yesterday (Friday) at 1815. Even with the air coming out of the "Silver Squeeze", it's still +1.9% on the year. And at the sharp end is Oil +17.9%, clearly no surprise given executive direction to curtail stateside energy supplies.

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