Archives

Wall Street and their friends in the Big Media have been having a field day since March.

You’ve seen the stories: Big Tech companies such as Amazon.com Inc. (AMZN) up 60%, Hertz Global Holdings Inc. (HTZ) more than tripling after filing for bankruptcy protection, airline and cruise line stock swinging wildly up and down…

All great stories to make you jump in head first, trade without thinking, and make your broker a lot of money while you’re at it.

One story they tucked “below the fold” has been the meteoric rise in precious metals.

Silver and especially gold have had a stellar year. The SPDR Gold Shares (GLD) ETF, probably the easiest way to invest in gold, is up over 18% this year.

If you bought it at the March bottom, you’d be up twice as much.

It’s been years since we saw that kind of move in gold.

Of course now that it’s up so high, Wall Street is starting to talk about it, ads for gold are everywhere on TV, and Robinhood traders are piling in.

In the long-term, they’re right. Gold and silver will keep rising.

But don’t join them. At least not yet.

Here’s why…

This is the week of headline risk. But not from the headlines getting all the attention.

Because the biggest Reality Gap this week is between Big Media’s obsession with short-term impact items like daily coronavirus numbers, poll numbers, and the occasional short-term earnings numbers on one hand.

And on the other, on the long-term concerns about China that traders are already starting to price in.

How do we know this? Last night, during Asia’s trading session, gold prices hit an all-time high in the spot (or cash) market of $1,920 per ounce.

Meanwhile, the dollar hit a two-year low.

You may not have heard much about either, but these two records being broken at the same time is no coincidence.

It’s not because of the coronavirus crisis, or the upcoming election.