Gold Is too Smart to Fall for the Fed’s Shenanigans

Hey Traders,

A funny thing happened yesterday … and I don’t mean the Buccaneers boat parade here in Tampa, although that was highly entertaining.

CPI came out unchanged,which was .2% lower than expected — and gold actually rallied

Gold traders and investors have been around for years …

They know a liar when they see one.

You see, the official CPI leaves out some of the most expensive costs that households have to bear …

Gold knows better … and if you are tracking inflation, you need to focus on money supply not CPI.

Golden Moves
The Red circles below are the inflexion points where Gold changed its trend because the Fed changed its policy on money supply …

  • The first one was in the financial crisis of 2008, when rates were pushed down to zero and the Fed had to invent quantitative easing (QE) in an attempt to stimulate the economy …


This was the one time gold was fooled by the Fed. … Gold traders and investors at first believed QE was going to create inflation. However, it didn’t because the money stayed within the banking system and never made it to Main Street.

  • The second circle was when the Fed began raising interest rates, causing Gold to correct. However, the economy was far too fragile and the Fed had to flip back to QE and lower rates.

  • The last circle is when the Fed stopped QE and gold corrected.

Power Income caught the trade in November 2020 for a 70% profit in just two days …

Bring It Home
It is so critical in trading to find the indicators that correlate to the products in your portfolio …

The Fed calculations don’t always include real-life expenses so they can be misleading.

Trade Gold using M1 money supply and your probability of success will increase dramatically…

This will especially matter in the years ahead as inflation breaks out to the upside.

Have a great day and as always …

Live and Trade With Passion My Friends,

Griff

 

 

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