Ugh. I would never short Gold, Swiss Francs, or any other "risk off" market. It's akin to selling stops.
I agree, I've done the backtesting and for the most part, shorting gives inferior returns over the long run. That is, I suppose if you weren't to specialize the technique into a fine art. But shorting gold atm wouldnt be smart, I think what I was attemting to hint at, shorting gold the other day was a better proposition than shorting ES, also, I had detected gold was gonna roll downhill a bit from that point.
I'm sure you can find a lot of short setups that work during a routine market phase. My concern is tail risk for a systemic market decline. We've been in a Trump bull market for the last few years, so it's easy to become complacent and forget what a crash looks like.
Gold and Silver Get Crushed as End-of-the-World Trade Implodes (Bloomberg) -- As investors fretted for most of the year that the trade war and slowing growth would end in a global recession, assets like gold and sovereign bonds provided protection. That ended spectacularly Thursday. Gold lost as much as $30 an ounce, Treasuries tumbled the most since summer and defensive equities sank. While continued signs of a detente in the U.S.-China trade war sparked the day moves, such a beat-down has been months in the making as peak pessimism on global and U.S. growth has ebbed. “If you’re priced for a pretty direct move into recession, which is what bonds, the yield curve, and some, but not all U.S. data, were pointing to late in the summer, suddenly you’re walking that back and saying not only will you not see a recession, but actually a pick-up in growth,” said George Pearkes, macro strategist at Bespoke Investment Group. “There are going to be days like these.” Strategists have long been pointing to an unwind of recessionary pricing across asset classes as the end of the end of the world trade. Sovereign bonds plunged around the world, with an 10 basis-point rise in the 10-year Treasury yield constituting a near three-sigma event, based on data going back to Donald Trump’s 2016 presidential election victory. Rates on benchmark 10-year French and Belgian securities climbed back above 0% for the first time in months. The German equivalent surged 10 basis points, though remained negative. The worldwide stock of bonds with sub-zero yields has shrunk to around $12.5 trillion. Gold was at $1,467.27 an ounce as of 10:55 a.m. in Tokyo Friday, having fallen 1.5% on Thursday. Silver lost 0.7%, extending its 3% slide in the prior session. “A large stock of positioning in precious metals has been built up on the long side, driven especially by ETF flows,” said Naufal Sanaullah, chief macro strategist at EIA All Weather Alpha Partners. “Real yields declined on FOMC, but have reversed that bounce and now metals are cracking important technical levels. So we believe precious metals have more downside to come.” Higher real rates decrease the relative value proposition offered by gold, an asset with no yield that had been benefiting from a rising stock of negative-yielding debt earlier this year, he added. The Japanese yen -- often sought after in times of stress -- weakened beyond 109 per dollar and is about 1% lower this week against the greenback. Bonds in the Asia Pacific region also retreated Friday, with Japan’s benchmark bond yield poised for its biggest weekly jump in more than six years. https://www.bloomberg.com/news/arti...of-the-world-trade-implodes?srnd=premium-asia
Gold’s Just Not That Appealing to Young Chinese Luxury Shoppers Elena Mazneva November 12, 2019 https://www.bloomberg.com/news/arti...turns-to-other-luxury-goods?srnd=premium-asia China’s Generation Z may be willing to spend more on luxury goods, but they’re not as keen on gold as their older compatriots. That’s according to survey by the World Gold Council, which showed just 12% of those aged 18 to 22 intend to buy gold jewelry in the coming year, much less than the millennial generation and people over 39. Their emotional connection with gold jewelry also “seems particularly weak” compared with other countries, the council said. The changing tastes among China’s young adults may signal a warning for the gold industry, which counts China as its biggest buyer. There are already signs that global gold demand has recently been driven more by exchange-traded fund investors than jewelry purchases. “It is undoubtedly a challenge for China’s jewelry industry to engage with the younger generation,” said Alistair Hewitt, director of market intelligence at the council. China’s young consumers may be distancing themselves from gold because it has long been associated with older generations, though their views may change as they grow older, he said. The difference in gold tastes between different generations in No. 2 buyer India isn’t as pronounced as in China. Gold jewelry attitudes are also more consistent among different age groups in the U.S., the survey showed. One bright spot for gold is its reputation as a store of value. While young adults want quick returns and are eager to take risks through investments like cryptocurrencies, they generally trust gold as way of preserving wealth over the longer term, the council said. The metal remains the third-most popular investment globally, behind savings accounts and life insurance. Even so, there are big differences in consumer appetite for gold around the world, with interest in China and India much stronger than countries like Germany or Canada, the survey showed. The survey questioned 18,000 consumers across six countries.
A lot of gold bug types claim gold has entered a new bull market. Some detractors still think it's in a long term secular bear market akin to 1980-2000. I guess only time will tell.
My impressions atm: Gold is slowly about to turn up. Stock Markets general about to rollover downhill. In Australia last couple weeks in particular, the stock market just seems to be drying up. If I look at the very top high volume movers, most are either flat or heading red, my algo buy signals have completely drawn a blank, just nobody home.
Maintaining the outlook, the general market rollover is slow but it's tipping. Just in time for a Xmas rally which aint gonna happen. Gold setting up for upturn. Sheesh though, Energy stocks are looking very sad.
Brits in Aussie gold rush in case 'all hell breaks loose' Shane Wright December 6, 2019 — 11.00pm https://www.smh.com.au/politics/fed...se-all-hell-breaks-loose-20191206-p53hiz.html British investors are buying a record amount of Australian gold amid fears Brexit and other global geopolitical tensions will destabilise the pound and the English economy. Figures from the Australian Bureau of Statistics show Britons bought $5.3 billion of Australian gold in the September quarter – the most ever in a single quarter and a 1400 per cent increase on the same three months last year. In September alone, $2.2 billion of Australian bullion was snapped up by British buyers – the single largest purchase of gold by British-based buyers in a month on record. The purchases, already high through the first half of 2019, accelerated after the departure of Theresa May and the elevation of Boris Johnson to Prime Minister as concerns of a "no-deal Brexit" grew. Britain has sailed past China as the biggest single purchaser of Australian gold. Through the first nine months of the year, the UK has purchased $9 billion of gold compared to China's $5.8 billion. London is the world's gold trading capital, with the Bank of England (BoE) holding 400,000 bars of the precious metal worth more than $200 billion. The Reserve Bank of Australia's (RBA) 80-tonne gold holding is stored with the BoE. The RBA confirmed it had not sold any of its holdings. What does 1kg gold bullion look like? It is understood almost none of the gold is being physically moved from Australia to Britain. Investors buy and sell gold without it actually leaving the bank's network of vaults, partly because there is a risk of losing small amounts in transport. Professor of finance at the University of Western Australia, Dirk Baur, said British investors' surge of interest in Australian gold was not surprising given the economic challenges facing the UK. Professor Baur, an expert on the financial economics of gold, said there might be a short-term safe-haven protection for investors by diversifying their holdings into the precious metal given the uncertainties surrounding Brexit. Investors were also seeking to protect themselves in the case of a fall in the pound if the British economy slowed as key elements of Brexit, such as tariffs or increased bureaucracy, kicked in. "It works as a currency hedge and as a safe haven," he said. "When you expect your currency may go down, then it makes sense to have something that is resistant to currency change. If all hell breaks loose in the wake of the election result [on December 12] or something happens during Brexit, then these people have double protection." Professor Baur said there had been increases in gold purchases during previous tumultuous events such as the September 11, 2001, terrorist attacks in the United States and the global financial crisis. The previous record for British quarterly purchases of Australian gold was in the first three months of 2009, when the UK economy slumped into recession and concerns rose of a global depression. The purchases in the September quarter this year are 36 per cent higher than in 2009. The surge in demand for Australian gold is contributing to the nation's strong export performance. While most focus has been on demand for iron ore and liquefied natural gas, which contributed to this week's 0.4 per cent lift in gross domestic product, the gold sector is also playing a part. Australia exported $19.6 billion of gold between January and September. It has already eclipsed the $19.1 billion exported through all of 2018. CommSec chief equities economist Craig James said concerns about the global economy were actually helping the Australian economy through demand for gold. He said a relatively low Australian dollar and a lift in the gold price over the past year, due to global economic worries, were working in Australia's favour. "For Australia, this is very much a big win. You've got the concerns over Hong Kong, the ongoing China-US trade dispute, and the British election and Brexit, so that is all giving Australia a lift," he said.
Gold, Month Average % change January 1.53 February -0.43 March -0.70 April 0.41 May -0.08 June -0.05 July 0.25 August 1.57 September 1.27 October -0.70 November 1.04 December 0.06 All months avg. 0.34 Sources: Dow Jones Market Data January tends to be a strong period of gold buying with Asian investors usually taking a shine to the commodity around Lunar New Year, when gold is offered as a gift.