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August 4, 2020 | Gold: Parabolic Financial Speculation, But Not Inflation!

Jack has over 20 years experience in the currency, equity, and futures arena. He is an investment advisor who has held key positions in brokerage, money management, trading, and research. Jack is founder and president of Black Swan Capital LLC. He was also founder of Ross International Asset Management (specializing in global stock, bond, and currency asset management for retail clients) and General Manager of Plexus Trading (specializing in currency futures and commodities trading).

Gold is in parabolic mode. Everyone loves it. Inflation and safe haven and the end of the dollar are the rationales.

1) This is not inflation. If it were, corn (green line overlaid) and all the other real stuff would be blowing off. It isn’t.

2) This is not the end of the dollar yet; if it were, why are emerging market currencies struggling? We expect one more corrective rally in the dollar to wash away the Johnny Come Lately bears.

3) Safe haven and yields. That make sense. But, how much of this is pure Fed Juice speculation? We have seen gold act just as a risk asset (similar to stocks) before, only to plunge on a big stock sell off. Gold a nice reservoir for needed margin call money.

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August 4th, 2020

Posted In: Black Swan Currency Currents

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