About Me

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 !!!

Sunday, July 09, 2017

Gold Price

On a global basis, indicators began to signal faster economic growth and an acceleration of
inflation in early 2016. In anticipation, there was a major speculative run-up in the gold price
from a depressed $1050 .oz up to $1375 into Aug. last year. Economic indicator data have lost
the strong upward surge seen over much of 2016, sensitive materials prices have leveled off here
in 2017, and inflation thrust measures have lost substantial upward momentum despite modest
improvement in capacity utilization. Moreover, new business order rates have been on the rise
while final sales have continued relatively sluggish, thus signaling the possibility of another
involuntary build-up of inventories. Without the anticipated follow through on balanced, faster
growth, the inflation acceleration story has faltered, and even with the recent continued weak-
ness in the USD, this year's rally in gold has faltered.  Gold Weekly 

You can probably add the failure of the Trump / GOP to advance its tax reduction / reform and
infrastructure investment programs to the gold price negative column as well. In short, gold
players have found fault with the late cycle 'reflation' story and gold has dropped near an inter-
mediate support zone of $1200 oz. As well, without evidence of higher and sustainable inflation,
gold traders have not been able to surmount the  $1300 level except for brief periods in recent
years.

Since I am a strongly growth oriented guy who thinks gold can help out portfolio returns
during periods of faster cyclical inflation, this has been a frustrating period amidst some false
starts. Since I also view the USD as technically oversold I am content to let the gold price
go ahead and challenge the $1200 level for now.

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