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Retired chief investment officer and former NYSE firm partner with 50 plus 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 !!!

Wednesday, December 07, 2016

Gold Price

The gold price is volatile as we all know. But it has been hard to handle this year even so. There
was a good long side counter trend rally early in 2016.The oil price was turning around and the
inflation rate was in bottoming mode. The positive price action in gold got out of hand as the year
wore on and on Jul. 10, I cautioned both gold and silver were overbought on record speculative
interest. Gold hung around briefly but has since tanked 15%. This is not your father's gold market.
Since the 2002 -03 period, long side speculative interest has increased by six fold and the
curmudgeonly old bugs who used to haunt the market have been swamped by large pools of fast
money, especially hedge funds. With the US dollar picking up again in Oct., and the stock market
in rally mode since Nov. gold has been shunned and now sits $200 oz. below the highs of this

Gold has experienced a bearish 50 day m/a  /  200 day m/a cross and although it is still above the
lows for the year, is now sharply oversold with speculative interest waning quickly. The dollar is
easing off, but the stock market, although overbought, remains strong short term. My economic
and inflation directional indicators remain positive, which would normally help gold's case, but
the market may await short term damage in stocks before gold can stabilize. Moreover, there
are gold players who trade off the oil trend and black gold has recently leveled off.

Such are the headaches of playing counter trend rallies.  Gold - Daily Price

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