Every week, I see the talking heads on financial media explain why their predictions last week were wrong, and make new predictions for next week. Since there are no consequences when they get things wrong, the incentive is to sound clever and make bold predictions that make for good headlines and sell copy. This bias is extremely dangerous for their audiences.
It’s all part of the razzle-dazzle show I call The Prediction Racket.
Of course, they’re right very every once in a while, like a stopped clock. Then it’s happy days; time to sell something to the gullible investment herd.
Today is a case in point. There are plenty who are telling all who will listen that they said gold would go up after the Fed’s announcement this week. And in fact, some did say so.
What makes this awkward is that I too wrote that gold was likely to rise after this week’s FOMC announcement.
And, yes, every one of the gold stocks in my portfolio was up substantially today, most by significantly more than gold itself.
But I didn’t predict the specific outcome we’ve seen. What I said was that if the Fed sounded dovish enough to make Wall Street happy, it would be bearish for the dollar and bullish for gold. At the same time, I said that if the Fed failed to do so, it would cause a major retreat on Wall Street—which would also be bullish for gold.
In other words, I didn’t pretend I knew what the Fed had to do, or what the markets would do.
My analysis was simply that either outcome was bullish for gold.
And I was right.
I want to make this clear, because I’m about to offer you more forward-looking analysis. I hope you’ll see the difference between this and the typical talking-head predictions that flood the airwaves.
So, for the record:
That said, here’s what I see coming up next:
In short, the outcomes I see for gold in the near term range from bullish to extremely bullish—to insanely bullish.
What about the trade war?
Could a deal with China turn the Fed more hawkish, propping up the dollar and taking the wind out of gold’s sails?
I don’t think so.
My outlook here is that the trade conflict will continue bubbling along for many more months—but that even if there’s real, credible progress, it won’t be enough to turn the Fed hawkish.
What if I’m wrong?
Well, another big difference between me and most of the financial talking heads is that I invest alongside my readers. There are highly material consequences for me if I get things wrong. I suffer personal loss if I don’t give good guidance.
This makes me extremely careful about all my projections of future trends. It’s why I don’t make bold predictions every week, month, or quarter. Rather than tell you what price gold will be trading on December 31 or any other day, I’m happy just to get the direction right.
But when all the likely scenarios are bullish for a given type of speculation, I’m, not afraid to make a call—and put my own money where my mouth is.
If you’d like to keep up with my take on this and other investable market trends, please sign up for my free, no-spam weekly letter, the Speculator’s Digest.
And if you want to see where I’m putting my own money today and speculate alongside me, please subscribe to my flagship publication, The Independent Speculator.
Either way, I’ll do my best to help you out.
Thursday, June 20, 6:46pm, EST, 2019