This economist sold half his gold position despite record surge: Here's why

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Despite gold prices hitting record highs early on Monday, disjointed real interest rates in the U.S. mean there is some vulnerability in the precious metal's current price levels, according to Lombard Odier Private Bank.

Weak real interest rates are typically positive for gold and vice versa. This could generally be explained by a fall in real rates reducing the capacity for bonds to sustain their purchasing power over a certain time period. This increases the attractiveness of alternative long-term assets that seek to preserve this purchasing power and therefore cools financial demand.

"We continue to see negative real interest rates as the main driver of gold prices, so take the 10-year real interest rate in the U.S., it is basically -1% now, levels we haven't seen since 2011 or 2012," Chaar told CNBC's "Squawk Box Europe." Chaar suggested that such deeply negative real rates would ordinarily indicate that no economic recovery is forthcoming and the U.S. economy will continue to contract, which Lombard Odier economists do not see as feasible or sustainable.

"We know what they are going through, we know that they have mismanaged the pandemic, but at some point the U.S. economy is going to recover and as such, real interest rates are going to follow, and that is going to be a tailwind for gold when we think about the months and the quarters ahead," Chaar concluded.

 

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Lol. What an idiot. Most economists don’t understand money.

This economist's position that negative interest rates have buoyed gold but...when U.S. economy improves, interest rates will rise, ergo price of gold vulnerable. He never considers the deliberately understated CPI nor the inevitability of inflation, both gold tailwinds.

He said that he only sold a position, quite natural for them to do that for the company or for a client.

Imagine selling gold for worthless fiat paper at a time when governments are printing trillions out of thin air, with big inflation coming!

Dude said he sold half his gold position and goes on to explain all the reasons it will keep going up.

Because he wants the profit. Common let’s say it outright! $GLD

I sold my $SGOL because when this is all sorted out, Gold drops again - that being said, it's now at $18.71 and I sold at $16.44 ... :(

When says to sell I’m bullish af!!!

He lost

Cause he is dumb ?

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