| Includes: AGOL, DBJP, DXJ, EWJ, EWV, EZJ, FJP, FXY, GLD, GTU, HEWJ, HGJP, IAU, ITF, JEQ, JPN, JPNL, JPP, JYN, NKY, OUN PHYS, QGLDX, SGOL, YCL, YCS
– Heavy is the head that wears the crown.
Among our less prescient perspectives has been the expectation that the precious metals sector would rekindle the flame it fervently held over the previous decade. Despite successfully exploiting the explosive downside pivots in silver and gold from May and August 2011 through the second quarter of 2013, the sector has continued to disappoint our more bullish leanings, while slowly circling the drain in a disinflationary counterclockwise rotation.
Over the past few months, we have taken a more agnostic approach to precious metals across the intermediate term, primarily due to: 1) the further breakdown in the yen this May (see here); and 2) the growing likelihood of a rate hike by the Fed – and greater similarities that gold was expressing with its secular low made along the Fed’s march to rate hikes in the summer of 1999 (see here). With gold achieving fresh five-year lows this week, we thought we would revisit the sector and offer up some thoughts on these two points.
Gold and the Japanese yen have trended closely together since the equity markets peaked in October 2007 and the financial crisis unfolded over the next two years. While gold set its closing high eight weeks before the yen in 2011, it has since followed the downside breaks in the yen with varying lags of several weeks – the most recent breakdown in the currency
OM ADVISOREY (JACKPOT CALL) 09173020055..08238187446