Gold Death Cross

[errolanderson]

Gold’s recent price plunge has triggered a significant bearish signal called the ‘death cross’. The 50-day moving average has now broken below the 200-day moving average.

Support for April gold was around $1,775 per oz, (IMO) which broke tonite. This technical indicator indicates the potential for steeper losses and lower potential trading range.

Analysts are pointing rising government bond yields as a key factor pressuring gold. In my view, there are far deeper global economic reasons for gold’s setback. Realize the internet right now is totally hyped on inflation talk, but the bigger risk in my view is incoming deflation. Gold appears tied to the hip by the stock market and stimulus talk, which isn’t a stable ship (IMO) given failing velocity-of-money.

The death cross has quite the notorious history from pre-warning 1929 to 2008 stock market setbacks.

[CommonCents]

No need for precious metals as a hedge when we have these wonderful new crypto currencies to provide economic stability in today’s world. How do you compare the value of something tangible like a physical asset such as gold to a company such as Bitcoin?

[shtferbrains]

Grain to new gold?

Maybe that's what Chicom is doing?

[wheatking16]

Gold is a poor store of value and the world is waking up that fact.

It has little to no utility and requires trust for fungibility.

I have no interest in the time and expense required to authenticate it's purity and value.

People feel good holding until they need it and then it almost useless.

The gold shills happen to be the ones selling it or will gladly store it for you.

I believe it is a sentiment indicator and little more.

[SASKFARMER]

Gold vs made up. I'll stick with gold because if WW# happens and whoever is around after won't survive on a made-up currency.

[furrowtickler]

Need a time machine
Go back and buy all the dirt possible in 2003 ....
can’t eat gold lol .

[macdon02]

Gold down means USD up, and oddly enough there's a 15 month correlation on corn and gold. So whatever happened 15 months ago in gold, you can expect in corn. So if this death cross proves correct, might want to make some grain sales a year + from now. Gold also runs on a 16 week cycle so can expect a high, low or acceleration type event next week.

[jazz]

Need a time machine
Go back and buy all the dirt possible in 2003 ....
can’t eat gold lol .

I am afraid land trumps bitcoin and gold pretty easy. Isnt an asset class with as much utility and return if prices are decent. And it cant be manipulated by the banks and wall street or CBs.

[helmsdale]

[helmsdale]

Lumber futures. Fml... and I'm trying to get my shit together to build a house.

[helmsdale]

Diesel prices are boarding a rocket to the moon as well I see.

[Austrian Economics]

A couple of observations: first off, the run up in commodity prices is transitory. The price of oil, for instance, is obviously affected by demand shocks due to major weather events in places like Texas. Once the weather warms up, prices will settle back down. Some are predicting a renewed long term bull market, but I doubt it.

The reason? The falling interest rate trend of the last 40 years is profoundly deflationary for commodities, and that trend continues to move down.

Secondly, the gold price is a function of interest rates. The trend down in interest rates is not a straight line, but a jagged one. Right now, we are in a short up-cycle. If central banks sit back and allow that to continue, we will be in another 2008 type scenario before long. Perhaps they will try to pre-empt the collapse by intervening in the bond market, but my sense is that they are too complacent to do that.

Before anyone sells the farm to buy Bitcoin, have a look at transaction costs and time lags that Bitcoin users face when they try to trade them for real goods and services. It's astounding. I can't imagine that any economy could possible function under such conditions if the use of Bitcoin became widespread.

[GDR]

Copper over $4.00 this morning. Look like deflation to you Errol? Must be for lack of velocity of money?

I'm guessing copper and other building materials will get a big push as a result of the mess in Texas. Also will be shortages of some materials for a year or so, the repair bills are going to be similar to hurricane damages.

[errolanderson]

Mass deflationary pressures are a serious incoming risk (IMO). With markets so heavily leveraged and a totally out-of-control global debt situation plus gradual failure of central stimulus (money printing) , how can inflation remotely take hold without pricking-the-bubble. Now pretend that rates are going to rise? Go figure . . . .

The next correction / crash (whatever you want to call it or not call it) will be harsh. No bones about this. And when it happens, all asset values will be under pressure. No bones about it.

Gold’s price drop is a clear warning of this (IMO).

[sumdumguy]

Gold only down forty odd bucks, not catastrophic in my eyes.