We at Minter are perhaps not being objective enough regarding the global equity markets. To be fair the markets have taken a great deal of negative news the past days, ranging from poor data in Europe and continued uncertainty regarding Brexit, to weaker economic data from the U.S. in the form of Retail sales and Industrial production, both contributing to the Federal Reserve research team revising down Q1 GDP growth estimate to just over 1%.
(this can be revised up or down as we get further economic data through March)
On the other hand the Chinese are being aggressive in terms of stimulating their economy and the much focused upon trade discussions, appear to be improving.
We like to watch commodities, primarily Gold and Oil, for clues about the global economy and investor risk preferences. We had a couple of charts our on our mail yesterday that highlighted the potential for higher prices in both commodities, as well as the potential for higher natural gas price levels in the coming sessions.
We wonder if gold is trying to tell us something?
Is the current move just a technical break of a range or is it an expression of worry on behalf of investors, that inflation or market turbulence is coming?
(Inflation doesn’t seem to be showing up in many developed countries, and inflation is seldom discussed as a short term focus in the markets currently.)
So why is gold climbing, if not inflation and not a weaker USD?
Could it be that the well documented, ever increasing level of debt, is finally getting the gold bugs into the game?
From Tradingeconomics.com: check out the growth of the US government debt!
I could go on and on, as the U.S. is not the only country where we see growing debt as an issue.
Not to mention the higher levels of debt for many corporations, state and local governments and those poor young adults with student loans! etc .etc.
The low rates we have seen have truly given many a reason to borrow!
We don’t see gold exploding from here, but if debt levels become more and more in focus, while the global economy slows, we believe there is a case for gold to climb higher, especially if the global markets should go into a risk off mode.
|Ticker||Date Opened||Entry Price||Stop||Target Price||Current Price|
– Mark W