The firming Dollar suggests the Fed’s foot is “expected” to stay on the interest rate pedal. The Bond, Euro, Gold, and the S&P 500 (BEGOS) Markets are down except for Oil.
Investors can hedge some of this selloff risk in counter-moving gold and its miners’ stocks, which tend to surge on balance when stock markets materially weaken.
In the GDX, following a double bottom, we're at support and could head upwards. We hold about 50% cash in the SGS Gold Portfolio.
Gold and all the precious metals are under pressure. There is a serious slowdown in the Chinese economy - one of the biggest we've seen.
Positions as of 8 August, 2023
When I can earn 5-6% on a certificate of deposit (CD), why would I want to own gold? Inflation is still here. If the dollar drops, then I want to own gold.
Except for energy price, inflation in the month of August should fall. I still expect a pause in interest rate by the Federal Reserve in its meeting on 20th September.
I get so many people saying, "Ira, when is the time to buy gold?" It isn't yet. It'll be the time when the Fed says that it's through with the rate hikes. The market is saying the Fed's not done.
The gold market is still under pressure because the dollar is up another 50 points. In the stock indices, we woke up and saw that Moody's had downgraded as many as 10 banks.
We are getting a little bit of a bounce in the gold. Gold had a reasonable range but under pressure most of the day. Bonds and notes continue to add yield.