When stocks tanked early yesterday, gold rose. That may be a sign of things to come.

February 22, 2023

Dear Fellow Investor,

The U.S. stock market started tanking out of the gate yesterday, and gold did something interesting in response.

It jumped higher.

That’s interesting because stocks were dropping because of more Fed rhetoric pointing to continued rate hikes, and recent history tells us that this should have also been a negative for gold.

Instead, the yellow metal was, at least briefly, a safe haven once again.

I say “briefly” because gold eventually succumbed to selling pressure by the end of the day, as the dollar strengthened. But, also interestingly, silver ended the day higher.

Today both gold and silver are down a tad, as the stock market recovers from yesterday’s big sell-off.

The important take-away, in my opinion, is that the markets aren’t nearly as correlated and monolithic as they once were. While the stock market, for example, is looking short-term for what the Fed will do in March, gold seems to be peering further down the road, toward the central bank’s eventual ending of that policy.

That’s what gold does. Consider in 2011, after the Fed announced “QE Infinity” — quantitative easing unlimited in time and degree. The popular opinion at the time (and I’ll include myself in this) was that this announcement should have been enormously bullish for gold.

Instead, the price peaked right about that time, and began a four-year bear market.

Why? Because gold was looking ahead to the next big Fed move, which would be tightening and rate hikes.

Once again, gold is looking ahead to the next big shift in the winds...when Powell & Co. stop raising rates. I think that day will come sooner than the market now believes, likely within two or three months.

So where does that put us now? I think gold will trade sideways to down in advance of the next Fed move on March 22^nd.

The $1,800 level represents strong support, and I wouldn’t be surprised if it acts like a magnet for the price in the days ahead. So traders may want to wait for lower levels to go long.

For investors, however, this general range is a good place to continue to accumulate the metals, as well as the junior mining stocks.

In that regard, I’m coming out with no less than four exciting new stock picks in our March issue of Gold Newsletter, coming out next week.

If you’re not already a subscriber, I suggest that you CLICK HERE to join the family...because you definitely don’t want to miss these new, urgent recommendations.

All the best,

Brien Lundin
Editor, Gold Newsletter
CEO, the New Orleans Investment Conference