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A Buy Rating For Gold: Our New TINA Rating


We were very impressed with gold's action after the jobs report.

We wrote that gold is for all markets recently.

Friday was only one day but another lovely confirmation of something underlying in gold.

This report includes one short diatribe about our new TINA rating, a must for Elazar followers.

Friday's jobs report showed upside to economic forecasts. That should be the type of report that sees investors toss out all safety hedges like gold (NYSEARCA:GLD). Gold went higher, yet again, no matter what. Gold gets the official, "No matter what" rating.

Let's start with a gold chart. Here's gold.

Gold is in red and green and the S&P 500 ETF (NYSEARCA:SPY) is in blue. Whether SPY went up or down gold continued to charge higher. We love this chart. We love how gold is acting. Love.

We went bullish on gold just ahead of Brexit (June 20th). On July 5th we wrote about it again because we were just so impressed with its "up in any market" action. It continues. That is something very special.

Friday's News Good For Gold? Not really, up anyway.

A good economic number should be good for gold but we would have expected it to sell off. We would have thought there would be imminent expectations for a rate hike.

The Wall Street Journal, known to be a spokesperson for the Fed said a rate hike was on the table for "September."

Higher Fed rates should be bad for inflation and gold.

Looking at the bond market reaction it tells you that a rate hike would stall growth which is why bond yields continue to plummet.

This is the 10 year bond yield dropping to fresh new multi-year lows. That deserves the official "wow" rating, wouldn't you agree?

This tells that bonds interpret the jobs number as, "Yeah right." Bonds don't think the economy is strong and, if anything think further rate hikes will hurt the economy.

If anything the bond market participants think the world is closer to the end than the beginning.

Here's the yield spread.

If you want to do some crazy Elazar yield math, the spread is dropping by about 10bp each month. It's currently around 80 bps. In 8 months your yield curve will be at zero.

That is a historic sign for a recession not rip roaring growth and inflation scenarios.

Nonetheless, to our point, gold twinkle toed higher anyway ("twinkle toed higher anyway rating.").

That is impressive.

So Friday recap, RIPROARING JOBS which should be good for gold. What do bonds say? No way this economy is strong, not good for gold. Bonds are talking recession in 8 months. But gold is up anyway.

If you can't already tell, we are falling head over heels in love with gold for two main reasons:

1) The gold price action, up in every market, yum

2) The underlying gold story, yum.

We talked about the gold action above.

Let's talk about the underlying gold story giving us multiple ways to win. Did I say Yum.

(You can tell we like gold because we NEVER said Yum ever before in a post unless it was about ticker (NYSE:YUM) ... no relation.)

1) Economic risk good for gold

2) Global inflation picking up good for gold

3) Brexit, Grexit, Spxit, Italexit, EUexit, Everyonexit citizens tucking away gold

4) Japanese citizens selling the strong yen and buying gold (insider yen selling)

5) Countries buying gold

6) Gold the only answer for long-term leadership post QE1,2,3,...

1+2+3+4+5+6) People are worried out there. It's just a murmur from writers and analysts that the world is one match away from going ablaze, but the citizens feel it too...