We Bring You This Critical Alert, Contributed By WealthResearchGroup.com and Their Founder, Lior Gantz, Who Our Staff Looks At For Accurate Economic Forecasting.
This week we’re seeing a clear paradigm shift with regards to institutional sentiment towards gold. In fact, on June 21st, the gold ETF was injected with $1.5B, which is its largest ever one-day inflow.
I’m not only interested in making a profit, which is generated by the uptrend in the underlying commodity. Gold’s price is always the precursor to much bigger swings in the mining stocks themselves.
Right now, the S&P 500’s allocated portion into the gold sector is 55% LOWER than its historical average. The upside potential is massive and if this price movement is sustainable and gold holds the line over $1,400, there will be an inflow into miners as well, not just the commodity itself.
As you can see, the market knows that the FED is not going to stand idly by and let anything happen to markets because Trump will come down on them with all the sheer might of the federal government and portray them as the villains.
Therefore, the market is holding the FED hostage and Washington is doing the same thing. The FED has acted as mommy and daddy to the market for such a long time that if it doesn’t ease immediately, it will be blamed at the first sign of trouble.
Rate cuts might assist in flattening the inverted yield curve, but that’s precisely when previous recessions have begun.
Take a look:
It is clear as day that the INVERSION is the indicator, but the actual steepening is the problem. Look at how that has actually predicted the previous major drawdowns.
Gold stocks have been the best-performing asset class coming out of both the 2000 bubble burst and the 2008 sub-prime mortgage crisis. History is repeating itself.
June has changed everything about the markets – the second half of the year is going to be wild as hell!
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