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June 3, 2018 | Italy, Gold, and Volatility

Lobo Tiggre, aka Louis James, is the founder and CEO of Louis James LLC, and the principal analyst and editor of the Independent Speculator. He researched and recommended speculative opportunities in Casey Research publications from 2004 to 2018, writing under the name “Louis James.” While with Casey Research, he learned the ins and outs of resource speculation from the legendary speculator Doug Casey. Although frequently mistaken for one, Mr. Tiggre is not a professional geologist. However, his long tutelage under world-class geologists, writers, and investors resulted in an exceptional track record. The average of the yearly gains published for the flagship Casey publication, the International Speculator, was 18.5% per year during Tiggre’s time with the publication. A fully transparent, documented, and verifiable track record is a central feature of IndependentSpeculator.com services going forward. Another key feature is that Mr. Tiggre will put his own money into the speculations he writes about, so his readers will always know he has “skin in the game” with them

Wall Street took a beating today, as did markets in Asia—and Europe, of course. It was political turmoil in Italy that sent waves of uncertainty sweeping around the world.

For what it’s worth, I don’t know anyone in finance in Europe who thinks the EU will break up. I do know American observers who’ve been saying it will happen. Personally, I don’t care to make a prediction. But if it does happen, I think it will be a slow-motion train wreck that will take years to unfold.

This doesn’t mean that Italy—or other weak links in the European chain—can’t cause plenty of turmoil, just as things are. We saw that in spades today.

But the really interesting thing to me was gold’s behavior during the day. It was more like a yo-yo than I can remember seeing in one day.

Why?

Well, the euro took it on the chin and the US dollar rose. Gold is priced in dollars. There are gold trades who seem to have a knee-jerk reaction to sell gold every time the dollar goes up. But we’ve seen many times over the years that when European markets turn fearful, a lot of participants turn to gold as a safe haven. This would explain why gold moved up sharply before the US markets opened, then dived…then moved back up again as Europeans took advantage of the sale prices.

The key takeaway here is that a higher dollar is not always bad for gold, as some people think. If the reason for it is acute fear and pursuit of safety, gold and the dollar can both rise at the same time.

And I do think we’ll see times like that frequently, going forward.

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June 3rd, 2018

Posted In: Louis James

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