About Me

Retired chief investment officer and former NYSE firm partner with 40 years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!

Tuesday, May 27, 2014

Gold Price

My view since the last couple of months of 2013 has been that global economic performance
should improve in 2014 and that, even if gold is in a long term bear market following the
bursting of the price bubble starting in latter 2011, the gold price was entitled to a counter -
trend cyclical rally in 2014. I did not assign a price objective, but I have been thinking it
could rise to around $1450 oz. by year's end off that low base of 1200 set late in the year.
And there was a good rally to kick of this year which carried the metal to 1380 before it tailed
off. Gold Price Daily Chart

Gold can be very volatile, so I did not think too much about the action in recent weeks. I have
been watching gold against the oil price and I think in March gold probably got a little
overpriced relative to oil as well as on its own RSI. The downdraft in the gold price now
has it approaching an oversold level and maybe also moving back in line with the oil price.
Well I have not changed my mind on prospects for gold this year, and I like the supportive
trends in oil and sensitive materials prices ($DJAIN on the chart). Even my inflation thrust
indicator is moving a little bit higher.

The amusing surprise with gold so far this year is that geopolitical tensions and uncertainties
are on the rise around the world, but there has been little discernible portfolio hedging in
favor of adding to gold ownership. the gold bugz used to feast on this stuff.

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