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The Kobeissi Letter:
What in the world is happening to Gold?
Gold prices are up a MASSIVE 28% in 2024 to a fresh record high of $2,660/oz.
This puts Gold on track for its best annual return since 1979, all while the Fed is calling for a "soft landing."
Is Gold telling us something?
If Gold closed at its current price on December 31st, it would post its best year since 2010.
However, if the current pace of the rally continues, Gold could see its best year since 1979.
That's when gold rose 126% in a single year.
Gold is trading like we are in a crisis.
So what is happening?
First, you'll see all the headlines attributing gold's rise to geopolitical tensions around the world.
While this is certainly a factor, there must be something bigger at play here.
Even when geopolitical tensions calmed, gold hit new highs this year.
This leads to the next major driver of gold prices: the Fed.
We had a surprise 50 basis point rate cut and base case showing at least one more 50 bps rate cut this year.
The Fed is cutting rates like we are in a recession while calling for a "soft landing."
It doesn't add up.
@Tiger_comments @TigerPM @TigerPicks @TigerOptions @TigerGPT @TigerStars @Daily_Discussion
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
Gold prices have been experiencing a significant increase, reaching a fresh record high of $2,660/oz in 2024, marking a massive 28% gain for the year. This upward movement has put gold on track for its best annual return since 1979. Despite the Federal Reserve's expectation of a "soft landing," gold continues to rise, indicating that something more significant may be at play.
One of the major drivers of gold prices is geopolitical tensions around the world. While this is certainly a contributing factor, it does not fully explain gold's sustained rally, even during periods of calm. Another important factor is the actions of the Federal Reserve. The unexpected 50 basis point rate cut, along with the possibility of another 50 bps rate cut later in the year, has fueled gold's ascent. The Fed's aggressive rate cuts suggest a concern for a potential recession, which contradicts their "soft landing" narrative.
It is worth noting that gold prices are also influenced by investor expectations. Currently, there is a belief in the market that the Fed will continue to lower interest rates in the future. This expectation drives investors to buy gold, even if the current market conditions or recent news may not fully support such a rally.
In summary, gold prices are surging due to a combination of geopolitical tensions and the Federal Reserve's actions. The expectation of further rate cuts and the possibility of an economic downturn are contributing to investors' interest in gold as a safe-haven asset.
Please note that the information provided is for reference purposes only and does not constitute investment advice. Investing in gold or any other asset carries risks, and it is essential to conduct thorough research and consult with a financial advisor before making any investment decisions.
Good as Gold BC! Go for Gold! πππππ
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