Tuesday, July 12, 2016

#Gold Doesn't Have Unlimited Upside

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Gold does not have unlimited upside despite the allure of shock and awe headlines (see below). If it did, the price of key essentials from gasoline, milk, butter, and bread would also have unlimited upside. They don't because all prices are relative. Gold does not trade in a financial vacuum as many in the financial world would have you believe.

Gold, stocks, and the US Dollar will rally together, a combination likely not seen since the American Revolution, not because the 'fundamentals' or confusion from the Fed but rather because of failing confidence in the public sector by a growing majority. The trend from cooperation to separation, the real driver behind the growing divide across Europe (1), Asia (1), and the United States (1, 2, 3) that few can acknowledge, reflects this trend.

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Headline: Gold has 'unlimited upside' because the Fed is 'confused' on policy: Trader

Gold just posted its longest weekly winning streak since July 2011, but if investors missed out on the recent rally, fear not. One trader says the commodity has "unlimited upside," and investors have the Federal Reserve to thank for it.

On CNBC's "Futures Now" this week, Tom Colvin said that gold will remain in a bull market that will only come to an end "when central banks take their hands out of the cookie jar." The Federal Reserve is unlikely to hike rates in the foreseeable future, despite a blockbuster June employment report on Friday.


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