Bigworld, The gold/silver comeback continues, and it will be interesting to see how high they get in the period ahead. Momentum is building, and it feels like gold could work its way back to 2000/oz, and silver could test the Mar/Apr highs in the 25-26 area.
Looking at the charts, the recent bounce in metals since Oct corresponds closely with the reversal of the US dollar over that same period. The lower dollar should help relieve the severe exchange rate imbalances that other countries have been enduring, so that part is good. But the big dollar drop, and the way longer term Treasury yields have plummeted recently, indicate that the market is expecting a sizable recession. The geopolitical risks are another big worry that unfortunately won't be going away anytime soon.
Fwiw, I recently brought my stock allocation back down to 12% from the previous 22%, and will probably just keep the powder dry for a while. Some of the money markets are paying from 3.5-4.0 range right now, so I figure not a bad place to wait for more clarity later in the year. Too many landmines out there right now imo, and a nasty recession that is just beginning.
Rickards says that Powell is determined not to repeat the 'Volker mistake', where Volker prematurely reversed course on his tightening (dropping rates by 7%), and then inflation roared back and he had to flip back to mega tightening, all the way up to 20%. So Powell will likely hold rates at the upper plateau level for a long time. Rickards says too long, and he expects a severe recession. And a lot in the financial world can start breaking and then snowball.
The Ukraine war is also a ticking time bomb, with a major Russian offensive about to start. Kissinger seems to be the only one seriously worried about us bumbling into WW 3. Ending that damn war would also help fix the many global supply chain disruptions (oil/gas, food, fertilizer, strategic metals) and thus bring down inflation. Instead, between Zelensky and the morons running US foreign policy, we'll end up with WW 3 and a global collapse.
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