Gold is doomed.

On the Eve of WWIII, and Gold Doesn’t Even Break the High of 2016!

To understand why gold is doomed, consider the following positive catalysts for gold:

  • The US launched missiles at Syria this month
  • “Nuclear War” touted non-stop by MSM and “alt-media”
  • Every possible political “doomer” headline manifested

… and despite all this, despite all of this, we’re still

BELOW $1,300/oz???

Let us defer to history for some insight into a similar situation:  the First Gulf War and the oil market.

Gulf War I and Oil

In the first Gulf War, the oil bulls exulted:  finally, a supply disruption that could win them a windfall that would keep them fat for generations!

What the market actually gave, though, was precisely what they deserved.

Gulf War I & Oil:  Chronology of 1990

  • Oil was $21/bbl at the end of July
  • Oil rose to $28/bbl by August 6
  • Oil hit $46/bbl by mid-October
  • In mere MONTHS, ALL of these gains were LOST
  • Oil would hit new lows, years later

Catalysts aren’t Weak:  The Underlying is Weak!

The problem isn’t that we don’t have enough headline noise or menacing tyrants:  it is that the object of this speculative capital, namely, precious metals, simply does not perform!

While BitCoin is a more challenging yet long-term spectacular short, Gold seems much easier to punish.  However, those who prematurely proclaimed Gold dead have seen the metal levitate and their short positions cost them, dearly, which paradoxically preserves the downside opportunity of this unduly precious asset.

Just Another Weak Asset With a Weak Response to Amazing Catalysts

Just like luxury residential real estate in Greenwich, which still drowns in unsold supply despite record highs in the US equity markets, gold languishes despite the best of all possible headlines.

 

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