Gyroscopic Investing

buddtholomew wrote:

MachineGhost wrote:

buddtholomew wrote: Nope. USD down on Draghi tightening which bolstered the Euro. This will reverse tomorrow and crush gold below 1000. Treasuries will sink on jobs report and stocks will rally to new highs.

I had to go look up the news before I would believe that.  There's no tigthening by Draghi.  It's just an overreaction to the type of bonds the ECB will now asset swap for, i.e. an increase in perceived easing.  One day wonder.

Tell that to stocks and LTT's. US is raising rates.

Meaning?

MachineGhost wrote:

buddtholomew wrote:

MachineGhost wrote: I had to go look up the news before I would believe that.  There's no tigthening by Draghi.  It's just an overreaction to the type of bonds the ECB will now asset swap for, i.e. an increase in perceived easing.  One day wonder.

Tell that to stocks and LTT's. US is raising rates.

Meaning?

Do you think we are seeing declines in these assets because US is not going to raise? US now has room to raise with a falling dollar.

What a perfect example of not being able to predict a damn thing.

Who would have bet money that a higher than expected employment report would have slammed gold?  I was expecting to power up the computer and see $1030 or lower after the report.  Instead we are going the other way.

Sure, it could be very temporary, but it is interesting nonetheless.

Looks like it has been so beaten down there had to be at least a little relief rally.

Cortopassi wrote: What a perfect example of not being able to predict a damn thing.

Who would have bet money that a higher than expected employment report would have slammed gold?  I was expecting to power up the computer and see $1030 or lower after the report.  Instead we are going the other way.

Sure, it could be very temporary, but it is interesting nonetheless.

Looks like it has been so beaten down there had to be at least a little relief rally.

Exactly.

BTW, I hope Budd took advantage of the "sure thing" to short gold. 

What a great lesson about market predictions.

Pointedstick wrote: What a great lesson about market predictions.

This is the thing that has really struck me since deciding to create a PP this calendar year. I've always held gold (so it's not specifically about that), but having 4 uncorrelated assets and observing them daily makes it very clear the markets are fickle and unpredictable. Even if you think you understand the macro situation and how the markets will react, one is most often wrong in their predictions.

That gold short isn't working out so well 
Good thing I didn't act on my predictions.
All is well for now.

Cortopassi wrote: Who would have bet money that a higher than expected employment report would have slammed gold?  I was expecting to power up the computer and see $1030 or lower after the report.  Instead we are going the other way.

That's normal behavior.  Higher real rates (higher yields - lower inflation) is bearish for gold.  No one wants to hold an asset paying no yield when other assets are.

MachineGhost wrote: That's normal behavior.  Higher rate rates (higher yields - lower inflation) is bearish for gold.  No one wants to hold an asset paying no yield when other assets are.

I spent the better part of an afternoon last week Googling and trying to figure out what the effect of higher rates would be on Gold. I found just as many articles making the case either way.

So would you care to expand on how you observe this to be "normal behavior"? When you say "No one wants to hold an asset paying no yield" what asset is that? Cash?

Fred wrote:

MachineGhost wrote: That's normal behavior.  Higher rate rates (higher yields - lower inflation) is bearish for gold.  No one wants to hold an asset paying no yield when other assets are.

I spent the better part of an afternoon last week Googling and trying to figure out what the effect of higher rates would be on Gold. I found just as many articles making the case either way.

So would you care to expand on how you observe this to be "normal behavior"? When you say "No one wants to hold an asset paying no yield" what asset is that? Cash?

That's because no one knows what causes these movements, or they would be able to predict them. Harry Browne had a book about that very topic.

Fred wrote: I spent the better part of an afternoon last week Googling and trying to figure out what the effect of higher rates would be on Gold. I found just as many articles making the case either way.

So would you care to expand on how you observe this to be "normal behavior"? When you say "No one wants to hold an asset paying no yield" what asset is that? Cash?

Okay, it's just ONE of the "normal behaviors" affecting the price of gold.  Any one can reign supreme at any given moment.  But I do believe it is paramount currently as the Fed is going to raise rates next week.  But hey, what do I know?  I'm not an expert and I could be wrong.

MachineGhost wrote:

Fred wrote: I spent the better part of an afternoon last week Googling and trying to figure out what the effect of higher rates would be on Gold. I found just as many articles making the case either way.

So would you care to expand on how you observe this to be "normal behavior"? When you say "No one wants to hold an asset paying no yield" what asset is that? Cash?

Okay, it's just ONE of the "normal behaviors" affecting the price of gold.  Any one can reign supreme at any given moment.  But I do believe it is paramount currently as the Fed is going to raise rates next week.  But hey, what do I know?  I'm not an expert and I could be wrong.

My Googling was based on the fact that I needed to re-balance from LT's and cash into gold to the tune of about $50k. Not a lot of money for some folks here but not quite pocket change for me at this point in my life.

Ultimately, I just followed the plan and did it. Looks like a rare good decision (flip of the coin) right now, but I guess time will tell as it always does.

I'm surprised to hear that a few PP investors have reached an upper re-balance band in treasuries and are now purchasing gold. If any asset is reaching an upper band it should be stocks. Personally, LTT's and Gold are well within re-balancing bands.

buddtholomew wrote: I'm surprised to hear that a few PP investors have reached an upper re-balance band in treasuries and are now purchasing gold. If any asset is reaching an upper band it should be stocks. Personally, LTT's and Gold are well within re-balancing bands.

I was surprised too.

Fred wrote:

buddtholomew wrote: I'm surprised to hear that a few PP investors have reached an upper re-balance band in treasuries and are now purchasing gold. If any asset is reaching an upper band it should be stocks. Personally, LTT's and Gold are well within re-balancing bands.

I was surprised too.

Perhaps I misread what you said above? Did you re-balance into gold out of treasuries. If so, what are your tolerance bands and the allocation prior to rebalancing?

Fred wrote:

MachineGhost wrote: That's normal behavior.  Higher rate rates (higher yields - lower inflation) is bearish for gold.  No one wants to hold an asset paying no yield when other assets are.

I spent the better part of an afternoon last week Googling and trying to figure out what the effect of higher rates would be on Gold. I found just as many articles making the case either way.

So would you care to expand on how you observe this to be "normal behavior"? When you say "No one wants to hold an asset paying no yield" what asset is that? Cash?

He means gold.

And down we go.  Did anyone really think at least short term this wasn't going to be a negative?  I hope all the darn pro-gold hucksters get flushed out with this and we can finally start a move up.

What, no cheering about a 7-week high in gold? Spoilsports!

I don't want to jinx anything!

FYI, is anyone else experiencing no email notification of new posts to subjects?  I have plenty checkmarked for notification, but I have not seen any come through for at least a week

If gold stays above $1000 through 2016, I'd be willing to call a bottom. Just because we want it to go to $500, doesn't mean it will. Past is not prologue.

God, please tell me I don't have to bear another year of gold hanging around $1000!

We want it to go to $500? Not me......

Staying at $1,000 sounds better.

Bought ten eagles today.
Feelin' groovy.

Go dualstow!!