No One Should Be Short On Gold, Says Precious Metals Firm CPM
Investors would be ill-advised to make financial bets that the price of gold will fall, according to a recent video report from commodities consulting firm CPM Group.
The video, hosted by Jeff Christian, founder, and managing partner of the company, notes that anyone with an outlook longer than a couple of weeks should be long. In other words, investors should bet on higher prices for the yellow metal.
The advice comes just weeks after gold prices hit an all-time high of $2,064 a troy ounce on August 6, according to data from Bloomberg. Since then, they’ve drifted back down to $1,939, recently. The SPDR Gold Shares exchange-traded fund, which tracks the price of the metal, has performed similarly.
Still, don’t count on bullion prices to continue retreating in anything but a temporary way.
In the video Christian quotes CPM’s research director, Rohit Savant as saying, “I wouldn’t advise anyone to be short gold at this point.”
Christian elaborates that investors who expect to hold their position for more than a couple of weeks want to be betting on higher prices, not on lower ones.
CNBC/Fred Imbert, Yun Li, Eustance Huang
Nasdaq falls more than 3% as tech plunges once again, Dow drops 550 points
Stocks fell sharply on Tuesday to start the week as technology shares were under pressure following their worst sell-off in more than five months last week.
The Nasdaq Composite dropped 3.7% and the Dow Jones Industrial Average plunged 558 points, or more than 2%. The S&P 500 slid 2.5%.
“High valuations in the mega-cap stocks are stretched far beyond historical levels,” said Bruce Bittles, chief investment strategist at Baird. “The technical indicators – high margin debt, fully invested mutual funds, CBOE options data showing record call volume, Wall Street letter writers at bullish levels — pointed to excessive optimism in the market which often suggests a consolidation/correction phase is likely.”
Gold’s, silver’s trajectory depends on rising inflation – RJO Futures
A post-COVID-19 global economy is creating a paradigm shift in financial markets that will continue to benefit gold, even as prices struggle to break through resistance at $2,000 an ounce, according to one market analyst.
In an interview with Kitco News, Daniel Pavilonis, senior market strategist at RJO Futures, said that the threat of rising inflation and the Federal Reserve’s new monetary policy stance to target average inflation of 2%, will keep real interest rates lower and support gold and silver prices in the long-term.
Pavilonis added that although the precious metals markets are struggling to attract some buying momentum, there is still some relative strength in the marketplace as prices hold critical support levels around the 50-day moving average.
“Pullbacks are being bought up,” he said. “Maybe we have a slow grind higher. What I’m trying to focus on right now is: are we going to start to see inflation and is it manageable inflation?”
Financial News/Shruti Tripathi Chopra
We are clearly seeing a correction and tech bubble will burst’, warns top fund manager
What does last week’s stock market seesaw mean? A correction is here and the “tech bubble” will burst, according to top investor Rob Arnott who is known as the “godfather of smart-beta” investing.
“We are clearly seeing a correction, Arnott said last week, pointing to the FANG+ stocks [Facebook, Amazon, Netflix, Google parent Alphabet and Microsoft among others] taking a beating recently.
“The FANG+ index was down 11% in just one-and-a-half days”, the founder and chairman of the board of Research Affiliates, a global asset manager, added.
Hundreds of billions of dollars were wiped off the tech sector last week amid worries of a Nineties-style bubble. The tech-dominated Nasdaq Composite saw its worst decline since the period ending March 20 and its first drop after five consecutive gains. The US markets are shut today for the Labor Day holiday.
“It’s a bubble,” Arnott said. “Bubbles burst. The FANMAG bubble will be no exception.”
On Friday, Apple shares entered correction territory – defined as a decline of between 10% and 20% from a recent high.