S&P today downgraded France and other European countries. Such a downgrade just before the long weekend should have caused about $70 of up move in gold. GLD and SLV not only did not respond, GLD and SLV are now down. Gold futures GCG2 are now down to $1633 and silver futures SIG2 are at $29.50.
Federal Reserve Bank has also leaked its plans on QE3. Based on historical patterns, this leak alone should have caused gold to go up by about $100.
Trifecta of long weekend, French downgrade and QE3 — all supposed to be extremely bullish for gold and silver based on the conventional wisdom, and what do gold and silver do? Gold and silver go down.
It is humbling to see that ZYX Global Multi Asset Allocation adaptive model, i.e., the model that automatically changes based on market conditions continues its streak of correctly calling gold and silver now five years in a row. Let us not be overconfident and be vigilant as nobody bats 100% in the business of investments.
