A quick update on a couple of important indicators.
The Gold/Oil ratio as represented by GLD/USO is bouncing hard today within its downtrend. As the gold mining bull I expect to be that is an important first step. Maybe be nothing right now, or it may be the start of something. If Gold/Oil double bottoms and turns up for real we would have an important fundamental to the gold mining industry coming into place.
Gold/Copper (GLD/CPER) is more of a macro indicator and as we noted in an update last week it got hammered to test the SMA 200 within an intact major uptrend. Gold/Copper is holding the uptrending SMA 200, so nothing has changed other than the counter-cyclical macro view lives on. If gold can avoid further weakness vs. cyclical commodities if the macro parties in Q4-Q1 it would keep the all-important (to gold mining) counter-cyclical view alive for H1, 2023.
“counter-cyclical ” could you please explain exactly what cycle(s) you are referring to? Do you mean bond yields? Or the federal funds rate?
An what would “macro partying in Q4-Q1” mean?
Thanks in advance
Economic cycles. Cyclical vs. counter-cyclical. Yields and Fed funds ultimately follow the cycles, which have been created by inflation and deflated by its removal.
Macro party into Q4-Q1 simply means an interim relief phase for the Q4 seasonal into or through January, if it occurs.
Thank you. There is an article over at Investopedia on “The Economic Cycle” that names “factors *such as* GDP, interest rates, total employment, and consumer spending”.
They have a video showing enlargements of tiny segments from what looks like a sine wave where — as in many cases of popular articles –the reader has to guess what is on the x and y axes (that is if the average reader has any idea at all what functions are).
They conclude with: “The exact causes of a cycle are highly debated among the different schools of economics”.
Not much the wiser after all that…it just confirms that economics is at most pseudoscience, just like psychology and sociology.
I deviate from the well heeled Wharton style views. I think it’s as simple as wax on, wax off in the age of Inflation onDemand. The cycles are regulated by a monetary authority’s machinations.