Second Thoughts on Gold

July 4, 2014..

I think my GLD position needs to get skinnier.  So skinny,….. it disappears.

True, GLD is on a mechanical buy signal, as are SPY and VTI.  But, if my thinking about why stocks will head higher is correct,…..(yield differentials among USA bonds , European bonds  and the earnings yield of USA stocks.) then,

1 ) The USA dollar will appreciate against  the Euro and Yen.

2) Gold will fall against the dollar.

3) I should exit GLD and eat a small loss ( $169 of a $25,000 position ) before I end up shaking hands with myself on SPY and VTI but biting my lip on GLD.

Thursdays abbreviated stock market session confirmed that yield differentials are widening and the markets are reacting as I thought they would.  If what I see is true, GLD can’t  move higher unless a Black Swan suddenly appears from behind the curtains.

For now overseas QE is the theme and that could make for a fun SPY ride.


Richard Maurice Gore



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