Gold

Via Karen Moley yesterday: Lowe’s carefully reasoned outlook for inflation puts him at distinct odds with the growing number of analysts who believe the combination of huge monetary stimulus programs launched by central banks around the world in tandem with massive government spending will light the fuse on inflation.

DXY was down last night as EUR popped: The Australian dollar caught the bid again: As gold went wow: WTI is pressing higher but Brent is stuck fast: Metals MOAR: Big miners were soft: EMs stocks pushed for breakout: With junk: As US yields crumbled: US stocks piled it on.

Australian dollar gold is at all-time highs this morning: Australian gold equities are matching the bull market: But note that equities usually very much overshoot the underlying metal before the bull market is done.

From Shane Oliver at AMP comes a good wrap of gold and the AUD: Introduction The price of gold has now broken out to a record high and the Australian dollar has risen 30% from its coronavirus panic low in March and broken above $US0.70.

DXY finally bounced a little: The Australian dollar still red hot: Gold turned volatile as it rockets higher: Oil is still a yawn: Dirt was mixed: Miners fell: EM stocks too: Junk eased: Yields keep falling: Nasdaq looks toppy as S&P fights for support.

The yoking of Bitcoin and gold is one of the strangest phenomena in contemporary markets.

The AUD is bid this morning as DXY sinks: Bonds remain pancaked: Stocks are up a little: Big Iron is struggling: Big Gas is down: Big Gold is marching as the metal hit an all-time high this morning.

And up she goes!

And running.

The AUD is still bubbling away this morning despite Victoria’s virus calamity (thanks RBA): Bonds are dead as the Dodo: Stocks have backed away from resistance but the chart is bullish: Gold is the story de jour.

The Australian dollar is still trying to push higher this morning.

Via Goldman: Historically, gold’s relationship with inflation is non-linear.

BofAML calls it: Gold prices have performed well in the recent period As the ultimate store of value, gold prices have performed well during the past 15 months, posting a rally of over 10% since the Federal Reserve did a monetary policy U-turn in January 2019.

The answer is a qualified yes for USD priced gold: Gold will run as the underpinnings of the USD weaken.

Here it is: In Aussie dollars it is very shiny: Yet most prominent local miners are lagging badly (with a few notable exceptions) What gives?

Clyde Russell asks an uncharacteristically stupid question: Is Australia the ultimate commodity hedge? When looking at the country’s natural resources the focus tends to be as its status as the world’s biggest exporter of iron ore and liquefied natural gas (LNG), and its competition with Indonesia as the top shipper of coal.

Literally like a mushroom cloud.

So says Jim Rickards at the AFR: He said there is only a 35 per cent chance of a recession in the US over the next year, thanks to the Federal Reserve’s change in monetary policy direction in July when the central bank cut rates by 25 basis points to 2-2.25 per cent.

Here’s the chart: The BTC news flow has been a bit rough with Barclays pulling the pin: The most prestigious banking relationship in crypto has ended.

Van Eck is bullish, at the AFR: Joe Foster, who picks gold stocks for VanEck’s 63-year old International Investors Gold Fund, said Australian gold miners are generally well managed but are unusually prone to locking gold prices into multi-year hedge arrangements.