Lear Capital: Gold and Silver Victims of Profit Wars

2010_01_05_17_53_260001After a volatile 2013, both gold and silver hit the ground running as they were among the best performing assets of Q1, 2014.  By mid-March, silver was up 10% and gold nearly 15%.  As the quarter came to a close, prices slipped and out came the gold and silver bashers in force.

When stocks fell 7% during the quarter it was deemed healthy and necessary.  When gold and silver just gave back some of their monstrous quarterly profits, it was, “I told you so.” Even as stocks recovered from mid-quarter losses, by mid-March, the Dow and the S&P 500 still only showed a big year-to-date goose egg for gains.  As the best performer, the NASDAQ scrambled to an up 5% position before tumbling back to a near-nothing gain by quarter end.

Imagine, the panic of fund managers to show investors a profit at the end of Q1.  For months, all investors heard was that economic recovery was strong and to the extent there was any bad economic news it was written off as weather related.  Had the quarter ended with a zero profit report amidst all the good economic news, investors could get restless.

Fund managers had no choice but to grab profit wherever they could.  Gold and silver became prime targets as it was they who had scored significant gains for the quarter.  Hence a modest sell-off of metals in order to facilitate a profit harvest.  April trading of both metals and stocks appear to support this thesis.  Gold and silver are up 1% while the geese that laid the goose eggs have headed back south.

Ultimately, time will tell the story but be warned.  By the time you are convinced that $17.5 trillion of debt and rising is somehow good for the long-term health of the economy and the markets, that’s when we will get hit from the blindside by another crisis.

Of course this is my opinion and not necessarily the opinion of others.  But, if you agree, I would be honored to have you follow me @DaveTheGoldDr.

2 thoughts on “Lear Capital: Gold and Silver Victims of Profit Wars

  1. The chosen money masters will continue to inflate both the stock market through money printing/QE. Eventually, foreign nations (China, Russia, Iran, and more) will wean themselves off the petro-dollar, and the party will be over and hangovers will abound. Have your gold now–be prepared!

  2. What we need, is to move ahead with more manufacturing, and tech maintenance type jobs. This will provide more stable tax payers for the future. Get the politicians to use money wisely for the people, rather than supporting lobbyists interested in funneling money to a few well positioned people. I hope I’m not just dreaming

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