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2/8/18

A good gold price Q&A on Kitco

It's not that I'm against gold pundits per se (or mining anal ysts or the never-ending stream of "LOOK AT ME!" experts that do the rounds on the interwebnetpipes, trade shows or conferences). Hell, I've even met a few over the years and some of them are quite decent company. It's just the level of blabber, the inanities, the permabull dogma, the BS and failed theories they repeat over and over in order to sucker in the dumbasses that gets me down.

But every so often I come across a name or face that talks real sense about the market which is also centred on gold (which may sound like common sense but in my experience it's rare to have an intelligent financial insight from a proponent of gold). Step forward Will Rhind, the CEO of GraniteShares (which I'd also never heard of until today) and this interview with the ever-easy-on-eye Daniela Cambone over at Kitco today. Rhind puts into words the thoughts I've had crystallizing about the metal since last week and does it far more eloquently than I could ever manage. Here's the blurb from the Kitco page but you really need to click over and watch the whole 5 minute Q&A, right here.

Total gold ETF holdings are at their highest level since May, 2013, and this could be due to a growing interest in commodities in general. Will Rhind, CEO of GraniteShares, told Kitco News that growing interest in gold is driven by two main factors: “weaker U.S. dollar, and more volatility and increasing fears of inflation in the market.” Rhind compares gold’s recent failure to rally in response to stocks dropping earlier in the week to what happened in 2008. “When you have a big shock in the market, what actually happens initially is that gold prices don’t respond in a very positive way,” he said, “and the reason for that is because the immediate risk-off trade is normally into the U.S. dollar and U.S. treasuries, and that’s exactly what happened in 2008; gold actually fell first when [stocks] crashed, but only then really started to pick up.” On monetary policy, Rhind doesn’t see rate hike expectations weighing on gold. “I think the rate hikes are priced into the gold market. If you look at what happened to the dollar when the tightening cycle started, the dollar started to fall, and gold prices and commodities started to move up,” he said. Rhind added that investors should focus less on monetary policy when assessing gold’s future and more on the dollar and equity market volatility.