Amazing invisible charts! A question from Italy

[Fabrizio Russo]

Mr. Vincent,
Very interesting your article plubished on FSO, but sorry I'd have a question: how do you conceal the commentary's two pillar assumptions: gold is about to break down a raising wedge and commodities do have and should confirm in the near future an enviable bullish trend? I mean: why should commodities skyrocket while gold is about to correct deeply? I learned in the past that gold in commodities market is a leading commodity market indicator. Many thanks in advance and have a splendid evening and night.
Fabrizio


Fabrizio - Verona, Italy

[Steven Vincent]

Hi Marco. I am not making the assumption that gold is going to break down from the wedge pattern. I am merely pointing out that the pattern is there and no one is recognizing its existence or considering the risk of the downside.

With regards to commodities, I am merely pointing out that they are in a healthy bull market which is unrecognized and may contradict pessimistic expectations about global economic growth.

Gold and commodities can and do go their separate ways at times. Gold is not a normal commodity in that it is not an economic input. It is not used in industry (very little). It is primarily a store of value and also jewelry. So its demand relies upon the preceived need for a store of value or for, basically, bling for rich people. If those demand factors diminish for any reason there is no economically fundamental demand to maintain the price (unlike silver, for example).

I am not saying that commodities will skyrocket while gold will decline. I am saying that that is a possibility that the market is ignoring. And the fact that the market is not paying attention to that possibility makes it more possible.