yes
To find a value gold stock is easier than to fight with the market so it requires some understandings in the Fed and the trading systems and one must ask oneself to see wether one is looking for a value stock or a stock to trade.
. It's the first time in a couple of years I saw more DOVISH committee members than ever before.
They're talking about the yield curve, the neutral rate and the risks associated with trade war and an out of sync with other central banks around the globe albeit the inflation is a clear evidence in the US
. The market seems to understand the Fed's policy statements as they DO support equities but gold is an ill-fated commodity in light of the king USD and an inverse yield curve that makes gold unattractive for traders.
USD
A strong USD is supported in a rising rate environment, raising inflation, a well bid offshore USD (called Eurodollar) in light of global currencies devaluations and a NON carry-trade available for traders
Yields
An inverse yield curve is happening when short term rate is rising faster than long term rate.
Bonds traders do widening ST yield when Fed's projected rate hike is a sure bet
The LT yield has been moving from flattening curve to a steepening curve as expected as the Fed's multiple rate hiked
When both yields are steepened then bonds traders will apply this formula. Yield Curve Steepening⇒"Buy the Curve" or Buy S-T & Sell L-T Treasury Futures
When they buy ST bonds then the yield is definitely inversed and It makes a strong case for the Fed to think twice but it also hurts gold too
Options
Bonds traders are similar to options traders. They're contrarians and always be ahead of the market when a tradable stock/future/yield reaches to a tipping point or to an extreme bullish/bearish level
According to Bonds/Options traders I BELIEVE the Fed will lower its projected rate hiking path and that's a boon for gold.
Well that's only a theory and It might not work as I AM losing money on gold stocks.
but I do see more value here.
Indonesian government has been trying to manipulate the IDR by raising its benchmark rate two times within two weeks to defense the rapid currency depreciation and to spur more investments in the country.
Rio has been trying to sell all of its stakes in Grasberg's gold/copper project to a state owned JV Freeport with the government owns 51% interest.
I think the government will hoard more gold in order to defense its sovereign risks as gold will be used as collateral to pay for government debts as what Venezuela did but the indonesia government is still far from defaults.
Well that's all about my investment in Krm and I do living in hope
KRM Price at posting:
7.1¢ Sentiment: Buy Disclosure: Held
(20min delay)
