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General Market Sell-Off Possible this weekChris Laird Gold has been benefiting from the excess central bank liquidity of the past years. Gold has been rising in all currencies. Stock markets and financial markets as well have risen on this liquidity. Gold often reflects this market inflation - as opposed to price inflation. I have said before that gold can take a hit if there is a general market sell off. Monday, Feb 27, gold, the USD, oil and the Dow, and the Chinese stock market, all sold off. I view this combination as a potential general market sell off - or the first signs. The Chinese stock markets sold off today, wiping off $100 billion of value, which for a Chinese stock market is huge. We have had gold rising recently, there are lots of profits. The same goes for financial markets. I definitely see the combination of a USD, gold, oil, Dow, and Chinese stock market sell off as an indicator of a possible financial market liquidation coming this week. Gold, oil and the Dow has recovered a bit, but that fits with the idea of remaining bullish sentiment. This is a preliminary assessment. However, I am willing to make this call of this risk at this time. This and next week, we are looking at a severe risk of a general market sell off in stocks and commodities - world wide. This fits with the view I put out last week of a situation where markets have been inflating with central bank easy money for the last few years. That has to reach a point of selling off and we might have just seen the first signs. I sent an alert to my subscribers about this. I base this on the simultaneous gold, USD, Dow, oil and Chinese market sell off today. These are recovering, but I think that might be just some sentiment - which is bullish still. There is still the Building Iran standoff. That is gold bullish. However, a market sell off can precede the Mid East going out of sight in war- which is gold and oil bullish in the extreme. Gold is a flight to safety. Mid term I am bullish gold. We may be right at the crux of a general market sell off. The Prudent Squirrel Newsletter is Chris Laird's macro economic gold newsletter. Subscribers are already aware of the contents of this article. The Prudent Squirrel Newsletter is 44 issues a year. Subscribers also get email alerts of changes in the gold market I foresee. The newsletter also focuses on general issues of survival, and this week there is a special on how one might deal with the threatening bird flue epidemic. Stop by and have a look. Chris Laird 321gold |
