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POSITION: no position

We currently do not have a short position in Gold, but here are the 3 most important macro factors to consider before re-shorting it:

  1. First, the “fundamental” – Gold underperforms when real interest rates are positive and rising.
  2. Second, the correlation trade – Gold currently has a POSITIVE correlation with the US Dollar of +0.86, and while the USD is up today, this is the first day that it has been up by more than 50bps since the State of the Union address. Dollar down from here supports gold down.
  3. Finally, the risk management setup – despite today’s rally, Gold remains broken on both our TRADE and TREND durations with those lines outlined in the chart we have attached below. 

In conclusion, the call is to short gold as it scales back up toward $1371.


Keith R. McCullough
Chief Executive Officer

The Golden Haze: Gold Levels, Refreshed - 1