Gold Rising

I hate gold…

It is a sterile asset (it earns nothing) and is prone to wild swings (as are all commodities). Gold Miners are worse in that they are a leveraged play to gold. It’s hard to trade, it can cost you your shirt with an “overnight” fix in a European open while America is closed. It just sucks as a trade, IMHO. Yet right now, it is what is moving. Likely as folks rush out of the Euro and Pound Stirling in fear of what BREXIT will mean, when it really ought to mean nothing to the currencies. After BREXIT, the UK will still exist. The EU will still exist. Both will still make as much product as they do now and they will still sell it.

All that might change is that German cars might cost more in Britain and British cars might cost more in Germany, so the Brits would buy more domestic cars. That, BTW, would improve their balance of trade since as of right now Germany sells more in to Britain than Britain exports…

But whatever the reason, it is what it is.

This is the Money Shot:

Gold fund vs Gold Miners vs other currencies 16 June 2016

Gold fund vs Gold Miners vs other currencies 16 June 2016

Gold rising, GDX, the gold miners, on a rocket ride. What happens next week? Who knows… IF this is a BREXIT trade, it needs to come off when the vote happens.

TLT is a long term bond fund. A $US Risk Off asset. It is rising too. The bug run is in the gold miners (GDX). GLD is a fund, and is showing rising volume as price rises. It isn’t all gold volume, just the fund most regular folks can get.

I don’t like the way MACD has ‘wobbled down’ to be around zero, but it is in a current up trend. I’d only do very short duration trades. Were I to do anything, but I’m not.

This one is more ugly and has SPY the S&P 500 as the main ticker:

SPY vs Risk Off tickers

SPY vs Risk Off tickers

EEM on the bottom, not a place to be – Emerging Markets (Brazil, China, …)

TLT, GLD, and SLV (that light grey) on top and rising. Risk Off world.

SPY, QQQQ basically flat on the year, but with a heartburn drop in the middle.

DJTA the Dow Jones Transportation Average lagging above EEM and below SPY. Not good.

The currencies, FXE, FXB, FXF showing $US Strength more than them being weak. The Swiss Frank being off 5%, British pound off 10% and Euro at flat. One presumes some folks in the EU sucking their money out of UK Banks (perhaps some central bank shenanigans to game the election?) But the $US up against the Swiss usually means US currency up, not Swiss down…

So, for what it’s worth, that is where there is a trade. I’m going to just site in $US until after next week…

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About E.M.Smith

A technical managerial sort interested in things from Stonehenge to computer science. My present "hot buttons' are the mythology of Climate Change and ancient metrology; but things change...
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  1. Pingback: Not Liking This SPY S&P 500 vs GLD Gold Chart | Musings from the Chiefio

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