Wild week in the world of commodities

April 27, 2020

London (Apr 27)  It was wild week in the commodity markets. The uncertainty over the global economy continues. The need for stimulus grows exponentially with time. Gold is building strength for higher highs.

Markets across all asset classes continue to experience a period where old assumptions are out the window. Risk has taken on a new dimension as the world continues to face a global pandemic. The stock market crash of 1987, the tech bubble around the turn of the century and the 2008 global financial crisis all pale in comparison to the current environment.

Gold was already in a bull market when coronavirus began spreading around the world. Governments can increase the money supply at will, but they can only increase the supply of gold by extracting more of the yellow metal from the crust of the earth. Central banks validate the role of gold in the global financial system as they hold the precious metal as an integral part of their foreign currency reserves.

The bottom line is simple – we are long gold, platinum and silver until our algorithm changes. Platinum and silver look weak but have not reversed yet. I will be doing a webinar Saturday, May 2, at noon EDT on hedging your equity portfolio.



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