Monday, June 20, 2016

Buy Rating Gold, Buy Rating Soybean, Inflation Cycle

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As inflation picks up we expect gold and soybeans to move up.
Geopolitical risks through isolationism.
Fed behind the curve and global government liquidity spree could drive inflation.
We think that we are about to move into a cycle of inflation. We previously were not sold on buying Gold into Brexit for a trade. Thinking about it a little longer term though we see multiple positives. The main change for us to get bullish is based on the realization that the Fed is stuck (they cannot raise rates) and so will likely let inflation out of the cage.
For many reasons prices have begun to move higher and we think central banks are limited and can't raise rates. We think one of the best plays for this is to buy gold (NYSEARCA:GLD). Soybeans (NYSEARCA:SOYB) would also be a good call based on this scenario.
We were previously on the sidelines for gold because we thought there was the risk the Federal Reserve will tighten rates and cause a deflationary cycle. After a deeper dive we think the Fed is behind the inflation curve and they are stuck and cannot raise rates. If they raise rates they will destroy the stock market. We believe they know this fact (For proof see Fed Mulls letting Market Float).
$gld, $gc

Chaim Siegel has been working with hedge funds and mutual funds as an analyst and PM his entire career. Chaim specializes in earnings and predicts, analyzes and reacts to earnings and earnings events as well as developing current company stories with a hedge fund perspective. If you want his analysis real time sign up to the right for real time email alerts. #in, $spy, $qqq, $iwm, $vxx, $ycs, $fxe, $EUO, $YCS, ^GSPC, INDEXSP:.INX, #elazaradvisorsllc, CME Globex: ES Disclosure: These trades can lose you money and principle especially when using leverage BY USING THIS SITE YOU AGREE TO TAKE ALL RESPONSIBILITY FOR YOUR OUTCOMES AND LOSSES AND HOLD BESTIDEAS, ITS CONTRIBUTORS AND ELAZAR ADVISORS, LLC HARMLESS

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