Gold, Trump & NST

@Ophir
@Hyperion Silver
@Slim Wanderer

This is similar to before the Trump rally after Trump won the election and there was drop in the gold price then there were panic sellers and once AGAIN with NST there is panic sellers.....

Gold has not dropped below $1,100, but hovered around the 1,190 to 1,210 mark recently. Trump polices with reduction in taxes and fiscal spending will lead to inflation.

The polices are very inward and the strengthening US dollar against virtually all currencies will effect US trade. Wordwide with the US dollar weakened it has propped up US retail such as Amazon etc. with overseas purchases. Every country has compartive advantages such as Australia is mining/primary produce/services (with services some i'm told), China manufacturing and Mexico manufacturing/tequila/Corona. So if the US attempts to manufacture given the high labour costs that would be added on overheads and strong US dollar who would purchase these goods (no one wold be able to afford these)



Also the US 10 year bond is strengthening upwards which is what dictates the mortgages rates for home loans is worth following in my opinion.

A strengthening US dollar will possibly make Gold fall in the short-term but when the US 10 bonds increases then you would be expect Gold long to be very profitable as borrowing in the US with interest/capital payments would become more difficult. Also combined that Gold is traded in US dollars, in AUD (Australian dollar) you would expect Gold to strengthen. (The risk here is Australia's biggest trade partner is China which is in a lot of debt.....so indirectly our most important trade partner will be effected by a trade war/US imposed tariff's would cause the AUD to weaken which is my prediction). The house hold debt in Australia is also one the highest in the
OECD if not the world I believe would be strained.




So given that the worldwide borrowing is at all time high with a strengthening US dollar and 10 year bond rate the to create debt stress in emerging markets does look like a high risk.

In the US, I would be watching student loans, car loans and increase US ten year bonds. The risk of margin calls increases in the US as the bond rates increases...the Nasdaq does look very high but maybe inflated. This year there is some curious floats such a Snapchat at $25 billion (way overvalued) and NASDAQ listed companies with very high P/E ratios. Nasaq quarterly/half year earnings came out which was apparently less then impressive.

The Dow Jones compared to the Nasdaq

Just remember Gold spiking is probably one Donald Trump tweet away.




Gold long does look good and also for NST.

Interesting times ahead but Gold long will be good.