Smart money always has an edge in precious metal investing because they know more, have better resources and have better indicators.  It is not uncommon for smart money to profit at the expense of an average investor.

With some effort, you can also gain an edge.  Let me show you how to start on the journey of gaining an edge.

Famous Billionaire Sells Gold

There were two main triggers for gold to take off in the beginning of 2016.  One of them was news of famous billionaire George Soros buying gold. Less informed investors bought aggressively on the news.

Soros has now sold gold by reducing his holdings in gold ETF (GLD) from 1.05 million shares to 240K shares.

Soros has also reduced his holdings in gold miner Barrick Gold (ABX) to 1.07 million shares from 22.9 million shares.  Soros has also sold silver miner Silver Wheaton (SLW).

Momo crowd aggressively bought gold on the news based on a highly twisted conspiracy theory.  However, algorithms at The Arora Report detected smart money aggressively selling gold into the rally around $1,363 driving gold to $1,348.

I have previously written on Forbes why buying gold after Soros is foolish.  I encourage investors to read that article as it provides insights  that an average investor does not possess and it also provides background for what you are about to read.

The fundamental backdrop for gold has not changed since Soros bought gold.  Why is he selling now?  What does he know that an average investor does not know? Let us explore together.

Two Rudimentary Truths

The first rudimentary truth is that if you know what everyone else knows, you have no edge.

The second rudimentary truth is that without an edge, unless you get lucky, you are not likely to make significant profits.

How To Gain An Edge

To gain an edge you have to know something that is either not well known or you know how to apply well known information in a different way to get better insights.

Next I am going to illustrate the point with an example that you can easily use in your investing to gain an edge.

Let us start by looking at a chart of weekly initial jobless claims.

Click here to see an annotated chart of weekly initial jobless claims.

The main driver of gold right now is its safe haven status against economic catastrophe….Read more at Kitco.


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