"Gold as a Near-Term Inflation Trade?"

Here’s what you need to know about gold in the near term… March 30, 2021 UNSUBSCRIBE | ARCHIVES “Gold as a Near-Term Inflation Trade?” External Advertisement The Name of Teeka Tiwari’s No.1 Crypto Is… Get a pen… Get a pad… And write the name of this crypto down. Click here to get the name of Teeka’s #1 Long-Term Crypto Pick (FOR FREE) Dear Money & Crisis Reader, Yesterday we assessed gold as a long-term investment. As a brief recap, gold is a TERRIFIC long-term investment as the chart below shows. It tracks the precious metal’s performance relative to stocks since 1967 — when gold was no longer pegged to currencies. Today we’re going to assess gold as a near-term trade based on inflation. Gold is indeed an inflationary hedge. And with inflation on the rise, gold should do very well — eventually. I say eventually because in the near-term, gold primarily trades based on real rates. Real rates are the inflation-adjusted return you’d make by lending your money to the U.S. government. To do this, you need to subtract what you’d earn from owning Treasury Inflation-Protected Securities (TIPS) from what you would earn from owning normal Treasuries. Doing this provides you with what’s referred to as “real rates” or the REAL (inflation-based) return you get from owning an asset. (I’ve previously talked about the TIPS/Treasury ratio as an indicator of screaming inflation…) You can see the close relationship between gold and real rates in the chart below: Two Factors When It Comes to Gold and Inflation With this in mind, the key for buying gold based on inflation hinges on two things: 1) What real rates are doing. 2) What the $USD is doing. Regarding the first point, real rates are currently stabilizing after a recent correction. Until we see real rates break out of this consolidation to the upside in a BIG way, then gold will continue to experience some downward pressure. Unfortunately, the U.S. Dollar isn’t helping the situation either… Warning: Financial Extinction Event Imminent On April 14th, 2021, a seismic event is expected to send our financial system into a devastating tailspin. At this point, there’s nothing the Federal Reserve, the government or even the President can do to stop it… If you’re not prepared for what’s coming, you should do so now. Click here to see how some extremely powerful strategies could mean protecting yourself from the carnage that’s coming… Gold is denominated in $USD. So, when the dollar strengthens, gold typically experiences some downward pressure. And unfortunately, that is precisely what is happening right now. As the below chart reveals, the $USD has entered something of an uptrend (blue lines) breaking through several lines of resistance (red lines). This has ALSO put downward pressure on gold. As a result, the precious metal has been in a downtrend for the better part of the last six months. So where does this leave us? As traders, I would potentially open a position in gold in the $1,600s. However, I would not think about “backing up the truck” to buy the precious metal until it breaks below $1,600. I’ve drawn these two lines of support in the chart below. These are the areas that gold becomes “attractive” for a trade. But until then, it’s “buyer beware” because both the bond and the currency markets are not working in gold’s favor. Best Regards, Graham Summers Editor, Money & Crisis P.S. Whether you’re buying it for the long haul, or as a near-term inflation play, you want to be sure to buy physical gold. We have a partner company that can help you do just that — Hard Assets Alliance. They make buying and storing your gold super-simple. You can get all your questions answered and set up an account at no charge right here. If You Missed Tesla’s Epic Run – Do NOT MISS This! After Tesla surged a whopping 695% in 2020, everyone’s wondering… Can Elon Musk do it again? It’s anyone’s guess. But one thing’s for sure… It pays to follow what Elon Musk is up to. So we dug deep to get the “hidden Elon story” no one else is covering. This has NOTHING to do with Tesla… And EVERYTHING to do with Elon’s next big project. You do NOT want to miss this opportunity. Click here to see what Elon has up his sleeve now. To end your Money & Crisis e-mail subscription and associated external offers sent from Money & Crisis, feel free to click here. If you are having trouble receiving your Money & Crisis subscription, you can ensure its arrival in your mailbox by whitelisting Money & Crisis. Money & Crisis is committed to protecting and respecting your privacy. Please read our Privacy Statement. For any further comments or concerns please email us at MoneyAndCrisis@threefounderspublishing.com. Three Founders Publishing, LLC. 808 Saint Paul Street, Baltimore MD 21202. Nothing in this e-mail should be considered personalized financial advice. 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