Stocks keep rallying higher and gold is stuck in the mid-upper 1300′s. Does this make sense? Not to me. Maybe stocks are just trying to catch up with gold’s performance last year because hey, QE means everything goes up, right? Maybe the bigger institutions that were long gold are getting out. Maybe both? Either way, there are whispers of QE3 this year. It wouldn’t surprise me, but at the same time I wonder if there will be any opposition with any clout in the matter. Chances are, there’s nothing that can actually directly force the Fed to not engage in QE3. Sure, Ron Paul can keep telling everyone how much this monetary policy is screwing over America, but no one can stop them. Even if the Fed is audited, what will come of it? Will Congress wake up and end the Fed? Yeah right. There are too many conflicts of interest between the politicians and the bankers. The banks have most politicians in their back pockets. It’s just a puppet show. Enjoy!
As for trades, I have a losing position in GDX, but was inclined to buy more on its seemingly irrational weakness. Now it’s losing for another day, but I’m not too worried if my views are correct in the gold is just setting up here for its next move up. Although I admit I could be wrong, I hope I’m not!