Category Gold

How Markets Misprice Uncertainty: Stocks, Gold, and Long-Term Opportunity How Markets Misprice Uncertainty: Stocks, Gold, and Long-Term Opportunity

How Markets Misprice Uncertainty: Stocks, Gold, and Long-Term Opportunity

Periods of heightened uncertainty tend to unsettle markets — and for good reason. When investors struggle to assess how long disruptions will last, or how far second-order effects will reach, asset prices adjust quickly. Energy costs rise, inflation expectations shift,…

The Macro of Institutional Trust: Fed Independence, Gold, and the Liquidity Cycle The Macro of Institutional Trust: Fed Independence, Gold, and the Liquidity Cycle

The Macro of Institutional Trust: Fed Independence, Gold, and the Liquidity Cycle

Trust is the invisible architecture of the global financial system. When central bank independence is questioned or fiscal discipline slips, markets don't just adjust—they convulse. While Kevin Warsh’s nomination as Fed Chair provides a stabilizing institutional anchor, it doesn't end the "debasement trade." With gold and silver undergoing a violent but necessary reset, investors must distinguish between technical profit-taking and the long-term diversification away from dollar-centric reserves. In modern macro, it’s always a matter of trust.

The Debasement Paradox: Why $4,000 Gold and 4% Treasuries Can’t Both Be Right The Debasement Paradox: Why $4,000 Gold and 4% Treasuries Can’t Both Be Right

The Debasement Paradox: Why ,000 Gold and 4% Treasuries Can’t Both Be Right

While the S&P 500 trades at a rich 24x forward earnings, its gains are heavily concentrated in the 'Mag 7,' whose towering Price-to-Free Cash Flow multiples (eg AMZN’s 174.4x) suggest a market dangerously "priced to perfection." But a deeper unease is driving gold. Up over 50% this year, its rally resembles the 2011 credit downgrade panic, fueled by fears of currency debasement and US fiscal recklessness, despite moderate 3% inflation. With gold’s recent 8.5% plunge hinting at volatility, investors may be wise to trim those spectacular gains, while the Mag 7 face an extremely high earnings bar

Navigating Market Volatility, Tariffs and Recessionary Signals Navigating Market Volatility, Tariffs and Recessionary Signals

Navigating Market Volatility, Tariffs and Recessionary Signals

Despite the welcomed relief rally - stocks are not out of the woods. The uncertainty introduced from Trump has inflicted a lot of damage. Not only on the market and its earnings - but on investor, consumer and business confidence. However, the full extent of the damage will only be felt in the months (years) ahead. For example, Bankim Chadha of Deutsche Bank has reduced his target for the S&P 500 for the year, citing doubts over whether tariff policies will be abandoned before they have already driven the economy into a recession. This echoes what I said recently "we could already be in recession"

When Is the Right Time to Buy Bonds?

Treasury yields are surging... the U.S., 10-year treasury - a rate which every financial asset is tied to - has ripped back above 4.60%. Credit card rates, home loans, auto loans... you name it... have all increased. The last time UY.S. 10-year yields traded above 4.60% - the S&P 500 was ~20% lower. From mine, the divergence is a head-scratcher... however, what I can say is risk assets have a tougher time advancing when yields push beyond this zone. The question is - is now a good time to increase bond exposure? I think the answer is yes.. and here's why

What Just Happened?

Only two weeks ago Fed Chair Powell said "the FOMC are not thinking about rate cuts". And it was premature to conclude with confidence they are at a sufficiently restrictive level. Well forget all that. Powell performed one of the more remarkable pivots ever seen from the Fed. He pivoted 180 degrees from his sentiment barely 14 days ago. Powell is now talking three rate cuts next year and the Fed have essentially "won the battle" over inflation. My take is the Fed is now more concerned about the business cycle; i.e., recession. There is a reason the Fed will cut - and that is the risk of dislocation in the economy (i.e., recession)

Investors Start Weighing the Risks

Investors have hit pause on equities - evaluating a new set of risks. For example, the S&P 500 is now trading close to the same level it was at the end of January. 8 months of gains gone! The world's largest index is up ~10% year to date... losing 2.4% this week. When you consider the S&P 500 lost ~19% last year.... it has not been a good two years. This post looks at why the outlook has deteriorated with 4 key charts: (i) 10-year yield; (ii) 10-2 yield curve; (iii) VIX; and (iv) gold - which touched $2,000 this week. What does it all mean?

5 Charts to Shape 2023

Inflation, rate hikes, the US dollar and bond yields all shaped how things traded in 2022. What will shape investment strategies and sentiment this year? From mine, look no further than what we see with employment, wage inflation and economic growth. And from there - how this dictates the pace and duration of Fed tightening.

6.2% YoY CPI… Nice Work Fed!

Inflation is easy to explain: it's excess money chasing too few goods. Milton Friedman put it like this: "it has always been (and always will be) a monetary problem". To that end, look no further than the Fed with money creation.

What Gold Needs to Rally

The precious metal caught a bid the past few weeks... most notably after 10-year bond yields pulled back. This move has some asking whether gold is about to rally - especially given the Fed's easy money policies and hotter-than-expected inflation for longer?