I suggested some months ago to buy gold and gold related stocks. Since then the price of gold, and performance of the related miners has gone nowhere but down…and down….and then down even more.
I lost $1500.00 bucks in options that expire today – likely the largest “losing trade” I’ve made in many months.
Putting this in perspective – I see $1500.00 (+/-) flash on my screens a few times a week (if not daily) as it represents “peanuts” in the grand scheme of things. I spent about a week watching the trade go against me before I put it aside in the “whatever” category and got on with my work – banking some of the best returns of my life over the same period of time via the currency trading.
The plain fact of the matter is… regardless of price – in the current “print til you can’t print anymore” environment – there is absolutely no reason to own gold. There is no fear. There is no “need to store value” while stocks are blasting to the moon! People (including myself) are making money hand over fist in a number of areas as gold bugs continue to debate/rationalize/haggle the reasons as to why their “all in bets” on the shiny metal haven’t made them rich – but more so bust their accounts.
Its foolish investing. It’s gambling. It’s naive and its completely irresponsible.
Bottom line – gold will make it’s move when stocks and “risk” tanks. And from what I gather – the FED is gonna work pretty damn hard to make sure that doesn’t happen……. anytime soon.
I do plan to “re enter” and take another shot at gold and related names – but as seen a week ago when gold popped some 30 bucks on the big DOW DOWN DAY – it looks pretty obvious to me that we won’t see a move in gold – until we see some serious fear enter the market – regardless of where the USD is at.
The Real Money is in Currency Pairs – Not Shiny Rocks
Why USD Strength Crushes Gold Dreams
While gold bugs keep crying about manipulation and waiting for their “moon shot,” the smart money is riding the dollar’s relentless climb. The DXY has been an absolute beast, and when you’ve got a currency backed by the world’s most liquid markets and a Federal Reserve that’s proven it will do whatever it takes to keep the party going, why would anyone park capital in a dead asset like gold? The USD/JPY pair alone has provided more trading opportunities in the past six months than gold has delivered in years. Every time we see that classic risk-off move where yen strengthens, it’s a gift – because you know damn well the Fed isn’t going to let sustained dollar weakness happen. They’ll talk tough about inflation, but when push comes to shove, they’re printing money and keeping rates accommodative because the alternative is economic collapse.
The fundamental disconnect here is that gold traditionalists are fighting the last war. They’re positioned for 1970s-style stagflation when we’re living in a world of coordinated central bank intervention. The EUR/USD has been range-bound precisely because both central banks are playing the same game – keep liquidity flowing and asset prices elevated. There’s no currency crisis, no systemic breakdown, just managed decline with enough stimulus to keep the wheels turning.
Central Bank Coordination Kills Gold’s Narrative
Here’s what the gold crowd refuses to acknowledge: central bank coordination has never been tighter. When you’ve got the Fed, ECB, BOJ, and even the People’s Bank of China all committed to the same basic playbook – maintain financial stability at all costs – there’s no room for gold’s traditional safe-haven premium. The GBP/USD pair perfectly illustrates this point. Even with Brexit chaos, political uncertainty, and economic headwinds, the pound finds support because the Bank of England falls in line with global monetary policy. No major central bank wants to be the one that triggers a deflationary spiral by tightening too aggressively.
This coordination extends to currency interventions too. We’ve seen it repeatedly – any time there’s genuine stress in forex markets, central banks step in with coordinated action. The Swiss National Bank’s aggressive intervention in USD/CHF whenever it approaches parity shows you exactly how committed these institutions are to preventing the kind of chaos that would actually drive gold demand. They’re not going to let currency markets blow up when they can just print more money and buy more assets.
Opportunity Cost is Killing Gold Positions
Every dollar tied up in gold positions is a dollar not working in currency markets where real money gets made. Take the AUD/USD pair – it’s been a volatility machine tied directly to risk appetite and commodity cycles. While gold sits there doing nothing, Aussie dollar moves give you 100-200 pip opportunities multiple times per month based purely on sentiment shifts and China economic data. The carry trade opportunities in pairs like USD/TRY or USD/ZAR have been absolutely printing money for traders willing to take calculated risks on emerging market currencies backed by real yield differentials.
The cryptocurrency space has also stolen gold’s thunder as the “alternative store of value” play. Younger investors who might have traditionally bought gold as a hedge are throwing money at Bitcoin and Ethereum instead. They’re getting the anti-establishment narrative with actual price movement and profit potential. Gold’s just sitting there like your grandfather’s investment strategy – outdated and underperforming.
The Only Catalyst That Matters
The brutal truth is that gold needs a genuine crisis to move, and central banks have proven they’re willing to do whatever it takes to prevent those crises from developing. The moment we saw massive coordinated intervention during the 2020 crisis – unlimited QE, direct market purchases, unprecedented fiscal spending – it should have been clear that gold’s traditional drivers were being systematically eliminated. The VIX spikes that used to send gold soaring now just trigger more intervention.
When gold finally does move, it’ll be because something broke that central banks can’t fix with more printing. But betting on systemic breakdown while missing out on the incredible opportunities in currency markets is just bad risk management. The USD remains king, volatility in major pairs continues to provide trading opportunities, and emerging market currencies offer yield plays that actually pay while you wait. Gold offers none of that – just hope and prayer that the system collapses enough to justify holding a dead asset.