{"id":20964,"date":"2014-02-17T13:28:21","date_gmt":"2014-02-17T21:28:21","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=20964"},"modified":"2014-02-17T13:28:21","modified_gmt":"2014-02-17T21:28:21","slug":"gold-setting-up-for-more-losses-in-2014-and-thats-the-good-news","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2014\/02\/17\/gold-setting-up-for-more-losses-in-2014-and-thats-the-good-news\/","title":{"rendered":"Gold Setting Up for More Losses in 2014&#8230;And That&#8217;s the Good News"},"content":{"rendered":"<p><strong>(This is an excerpt from an article I originally published on Seeking Alpha on January 6, 2014. <a href=\"http:\/\/seekingalpha.com\/article\/1929231-gold-is-setting-up-for-more-losses-in-2014-and-thats-the-good-news\" target=\"_blank\">Click here to read the entire piece<\/a>.)<\/strong><\/p>\n<p>This year started off with a strange combination of trades. One of the more surprising was to watch the U.S. dollar index (UUP) start the year strong at the same time gold (GLD) experienced a rare bit of relief.<\/p>\n<p>The U.S. dollar index has rallied over the last three days to a one month high and is finally at a new post-tapering high. <\/p>\n<p><center><br \/>\n<figure id=\"attachment_20968\" aria-describedby=\"caption-attachment-20968\" style=\"width: 540px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/01\/140103_DXY0.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/01\/140103_DXY0.png\" alt=\"The dollar finally shows some post-tapering lift but it still trades just above its QE3 reference price\" width=\"550\" height=\"375\" class=\"size-full wp-image-20968\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/01\/140103_DXY0.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/01\/140103_DXY0-300x204.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-20968\" class=\"wp-caption-text\">The dollar finally shows some post-tapering lift but it still trades just above its QE3 reference price<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>At the same time, GLD has rallied the last three days to close at a post-tapering high.<\/p>\n<p><center><br \/>\n<figure id=\"attachment_20967\" aria-describedby=\"caption-attachment-20967\" style=\"width: 540px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/01\/140103_GLD.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/01\/140103_GLD.png\" alt=\"SPDR Gold Trust (GLD) is suddenly showing some post-taper lift\" width=\"550\" height=\"375\" class=\"size-full wp-image-20967\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/01\/140103_GLD.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/01\/140103_GLD-300x204.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-20967\" class=\"wp-caption-text\">SPDR Gold Trust (GLD) is suddenly showing some post-taper lift<\/figcaption><\/figure><br \/>\n<strong>Source for charts: <a href=\"http:\/\/www.freestockcharts.com\/\" target=\"_blank\">FreeStockCharts.com<\/a><\/strong><br \/>\n<\/center><\/p>\n<p>GLD&#8217;s bounce is particularly important because it comes at a time when it surely should have cratered through 2013&#8217;s low in the wake of what some are interpreting as the beginning of monetary tightening by the Fed. <\/p>\n<p>The Fed of course is eons away from tightening, at least rhetorically. The last Federal Reserve statement reminded the market that <a href=\"http:\/\/federalreserve.gov\/newsevents\/press\/monetary\/20131218a.htm\" target=\"_blank\">the Fed will remain extremely accomodative<\/a>: &#8220;&#8230;the Committee today reaffirmed its view that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens.&#8221;<\/p>\n<p>The Fed has also given itself a LOT of latitude in determining when to finally hike interest rates (emphasis mine):<\/p>\n<p>{snip}<\/p>\n<p>The end result is what I call a &#8220;sample of tapering.&#8221; The Fed&#8217;s move is far from tightening, but it does officially put tightening on the radar of market participants. {snip}<\/p>\n<p>On January 1, 2014, CNBC ran a story headlined &#8220;<a href=\"http:\/\/video.cnbc.com\/gallery\/?video=3000231377\" target=\"_blank\">Why gold bugs should brace for an \u2018awful\u2019 2014<\/a>.&#8221; The international desk interviewed Dominic Schnider, Head of Nontraditional Asset Classes at UBS Wealth Management, who provided an end-of-year target for gold at $1050. {snip}<\/p>\n<p>My ears REALLY perked up at the following pronouncement: &#8220;Right now, you don&#8217;t really need to have any insurance assets like gold against all kinds of economic or financial tail risks.&#8221; {snip}<\/p>\n<p>The good news is that these developments set up opportunities to accumulate gold at much better prices. It makes more sense to buy insurance for lower prices than higher prices. I hope to be well-positioned to accumulate at $1050, even $1000.<\/p>\n<p>The soaring stock market is helping to breed more comfort with overall financial conditions. {snip}<\/p>\n<p><center><br \/>\n<figure id=\"attachment_20966\" aria-describedby=\"caption-attachment-20966\" style=\"width: 459px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/01\/140103_SP500vsGold.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/01\/140103_SP500vsGold.png\" alt=\"The S&amp;P 500 priced in gold has the appearance of printing a bottom\" width=\"469\" height=\"337\" class=\"size-full wp-image-20966\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/01\/140103_SP500vsGold.png 469w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/01\/140103_SP500vsGold-300x215.png 300w\" sizes=\"auto, (max-width: 469px) 100vw, 469px\" \/><\/a><figcaption id=\"caption-attachment-20966\" class=\"wp-caption-text\">The S&#038;P 500 priced in gold has the appearance of printing a bottom<\/figcaption><\/figure><br \/>\nSource for data: <a href=\"http:\/\/www.gold.org\/investment\/statistics\/gold_price_chart\/\" target=\"_blank\">World Gold Council<\/a> and <a href=\"http:\/\/finance.yahoo.com\/q\/hp?s=^GSPC+Historical+Prices\" target=\"_blank\">Yahoo Finance<\/a><br \/>\n<\/center><\/p>\n<p>{snip}<\/p>\n<p><center><br \/>\n<figure id=\"attachment_20965\" aria-describedby=\"caption-attachment-20965\" style=\"width: 467px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/01\/140103_SP500vsGoldCloseup.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/01\/140103_SP500vsGoldCloseup.png\" alt=\"The S&amp;P 500 has now reversed over fours years of losses relative to gold\" width=\"477\" height=\"319\" class=\"size-full wp-image-20965\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/01\/140103_SP500vsGoldCloseup.png 477w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/01\/140103_SP500vsGoldCloseup-300x200.png 300w\" sizes=\"auto, (max-width: 477px) 100vw, 477px\" \/><\/a><figcaption id=\"caption-attachment-20965\" class=\"wp-caption-text\">The S&#038;P 500 has now reversed over fours years of losses relative to gold<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>{snip}<\/p>\n<p><center><br \/>\n<figure id=\"attachment_20974\" aria-describedby=\"caption-attachment-20974\" style=\"width: 546px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/01\/140103_DXY0vsGLD-weekly.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/01\/140103_DXY0vsGLD-weekly.png\" alt=\"The ever changing relationship between the U.S. dollar and gold\" width=\"556\" height=\"385\" class=\"size-full wp-image-20974\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/01\/140103_DXY0vsGLD-weekly.png 556w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/01\/140103_DXY0vsGLD-weekly-300x207.png 300w\" sizes=\"auto, (max-width: 556px) 100vw, 556px\" \/><\/a><figcaption id=\"caption-attachment-20974\" class=\"wp-caption-text\">The ever changing relationship between the U.S. dollar and gold<\/figcaption><\/figure><br \/>\n<strong>Source for prices: <a href=\"http:\/\/www.freestockcharts.com\/\" target=\"_blank\">FreeStockCharts.com<\/a><\/strong><br \/>\n<\/center><\/p>\n<p>So, overall, I see every reason to believe Schnider&#8217;s forecast even if some of the components of the forecast somewhat conflict. {snip}<\/p>\n<p>Be careful out there!<\/p>\n<p><center><br \/>\n<object id=\"cnbcplayer\" height=\"380\" width=\"400\" classid=\"clsid:D27CDB6E-AE6D-11cf-96B8-444553540000\" codebase=\"http:\/\/download.macromedia.com\/pub\/shockwave\/cabs\/flash\/swflash.cab#version=9,0,0,0\" ><param name=\"type\" value=\"application\/x-shockwave-flash\"\/><param name=\"allowfullscreen\" value=\"true\"\/><param name=\"allowscriptaccess\" value=\"always\"\/><param name=\"quality\" value=\"best\"\/><param name=\"scale\" value=\"noscale\" \/><param name=\"wmode\" value=\"transparent\"\/><param name=\"bgcolor\" value=\"#000000\"\/><param name=\"salign\" value=\"lt\"\/><param name=\"flashVars\" value=\"startTime=000\"\/><param name=\"flashVars\" value=\"endTime=000\"\/><param name=\"movie\" value=\"http:\/\/plus.cnbc.com\/rssvideosearch\/action\/player\/id\/3000231377\/code\/cnbcplayershare\" \/><embed name=\"cnbcplayer\" PLUGINSPAGE=\"http:\/\/www.macromedia.com\/go\/getflashplayer\" allowfullscreen=\"true\" allowscriptaccess=\"always\" bgcolor=\"#000000\" height=\"380\" width=\"400\" quality=\"best\" wmode=\"transparent\" scale=\"noscale\" salign=\"lt\" src=\"http:\/\/plus.cnbc.com\/rssvideosearch\/action\/player\/id\/3000231377\/code\/cnbcplayershare\" type=\"application\/x-shockwave-flash\" \/><\/object><br \/>\n<\/center><\/p>\n<p><strong>(This is an excerpt from an article I originally published on Seeking Alpha on January 6, 2014. <a href=\"http:\/\/seekingalpha.com\/article\/1929231-gold-is-setting-up-for-more-losses-in-2014-and-thats-the-good-news\" target=\"_blank\">Click here to read the entire piece<\/a>.)<\/strong><\/p>\n<p>Full disclosure: long GLD<\/p>\n","protected":false},"excerpt":{"rendered":"<p>(This is an excerpt from an article I originally published on Seeking Alpha on January 6, 2014. Click here to read the entire piece.) This year started off with a strange combination of trades. One of the more surprising was to watch the U.S. dollar index (UUP) start the year strong at the same time &#8230; <a title=\"Gold Setting Up for More Losses in 2014&#8230;And That&#8217;s the Good News\" class=\"read-more\" href=\"https:\/\/drduru.com\/onetwentytwo\/2014\/02\/17\/gold-setting-up-for-more-losses-in-2014-and-thats-the-good-news\/\">Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[199],"tags":[200,24,499],"class_list":["post-20964","post","type-post","status-publish","format-standard","hentry","category-commodities","tag-gld","tag-gold","tag-spdr-gold-trust"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Gold Setting Up for More Losses in 2014...And That&#039;s the Good News - ONE-TWENTY TWO: Trading Financial Markets<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/drduru.com\/onetwentytwo\/2014\/02\/17\/gold-setting-up-for-more-losses-in-2014-and-thats-the-good-news\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Gold Setting Up for More Losses in 2014...And That&#039;s the Good News - ONE-TWENTY TWO: Trading Financial Markets\" \/>\n<meta property=\"og:description\" content=\"(This is an excerpt from an article I originally published on Seeking Alpha on January 6, 2014. 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Click here to read the entire piece.) This year started off with a strange combination of trades. One of the more surprising was to watch the U.S. dollar index (UUP) start the year strong at the same time ... 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