Loading ...If the Fed is looking at these (added 2008/2011)…
Wow… what happened in these past 2 days? Inflation expectations CRASHED… gold should be tanking… does it smell incoming fiscal and monetary easing?
If they don’t come fast… it might sink…
Silver should of crashed… but didn’t … yet.. what is happening?!?!
Edit: adding what happened in 2011… gold actually started crashing ahead of this…
Edit: adding 2008 …. holy !!!!
IMO, the Fed and global CBs do not want inflation expectations to rise. Why should they? Inflation expectations have cratered and remained flat since 2013, yet the US stock market went on one of the greatest bull runs in history during that time.
At some point the US stock market will have to top vs commodities and give back some of the ridiculous relative gains it has made since 2011. I really thought that last year we may have gotten that top, but the $CRB’s and GCC’s charts are an absolute disaster. The $CRB has a price target of about 125 based on the H&S break.
The coronavirus has been pretty convenient for the Fed in that sense. I am expecting a serious bounce in US markets around the FOMC. It will be just perfect if US stocks make new high vs commodities on that bounce.
I’m guessing that commodity diehards are probably going to throw in the towel this summer. Yet, I still can’t say commodities will outperform US stocks for a sustained period until I see it with my own eyes. I suppose they should first prove that they can make a higher high in absolute terms before we worry about their performance relative to US stocks.
It’s quite possible that commodities are going to stay flat for a few more years as the very long term MAs finally catch down to current price levels.
It’s possible $gold is discounting additional QE. But then, why should gold stand alone in doing that?
It’s also arguably overdue for a significant, multiweek correction, but a 2013 style massacre seems unlikely to me.
It’s interesting to note that in the above charts, gold looks like it broke down before inflation expectations did. That doesn’t appear to be happening this time. So far, this time really does look different. I just wish silver would get onboard too.
Until silver’s 200 WMA crosses above it’s 400 WMA (which if the 200 WMA were to stay flat from here could come as late as late 2021 or even early 2022), it is going to remain vulnerable. Ideally, it would explode above the 400 WMA this year, but it just seems very unlikely in the near term. I think if it does make a move it will be after June, but that is just a guess.
Nice post Nautilus. I’m thinking first we close the month with gold/spx breakout confirmed… but pullback in 2 qrt for gold vs spx. THEN whatever QE and easing will start to really pile on… then we get in 3rd and 4th quarter a strong rise in gold vs spx.