Gold is your backstop in portfolio allocation | 21 May 2021
Gold Price Forecast relative to
Long Term Monthly (LT-M) - Medium Term Weekly (MT-W) - Short Term Daily (ST-D) - and Hourly (not shown) data.
(Previous week in brackets)
|1880 (1841) (unch)
|Au Trend||↑ (↑)||↑ (↑)||↓ (↓)|
|Au % Risk
|50 (48)||76 (65)||88 (80)|
Portfolio allocation 50% (35%)
Physical Gold: Nature's currency
21 May close: Due to the large correction in our crypto portfolio (see crypto blog), the precious metals portfolio increased to 50%. This, again and again and again, shows the importance of owning precious metals to protect. Daily risk turned down on Friday but is not finished on the upside. A more extreme risk percentage is required preferably with a bearish divergence reading. Medium and Long term are still very bullish readings as we have yet to witness a hard technical longer term cycle top approaching. Not yet seen since the Dec 2015 bottom. A very strategic hold and 50% metals with other major asset classes in high risk mode is comfort.
We really wonder why Gold needs to prove itself everytime its under pressure and fast asset appreciation greed takes over mindset. Right now, 50% protection is a steal whilst stocks and crypto are potential bonusses as they resume their uptrends again.
14 May close: One week ago Finnish CB chair and ECB member Olli Rehn repeated his view to let inflation run (well) above official target, thus without raising interest rates. It basically means that real rates will be even more negative without there being a history for diagnose of future economic consequences. A minimum of between 10 and 30% Gold allocation therefore remains the key asset to protect 80% of total assets if financial markets decide to take a dive. Our current Gold, Silver and Platinum allocation has risen to 35% from 30% due to this week's drop in crypto. The key longer term risk weight indicators for Gold/USD above still confirm that Gold has further to go. Strong Hold. No change to the allocations of Gold, Silver and Platinum.
We will hopefully update our other pairs within the next few days. Crypto has seen pressure across the asset class and our general theme is to maintain the existing allocation of BEST which has suffered due to relatively sizeable profit taking by some early adopters. In spite of that, the entire space has been cautioned last week and this weekend again due to the speculative nature of most crypto assets. The BEST reward system with increased turnover and another fairly succesfull 23M BEST burn in April drives the 'hodl' strategy. The token can only be traded marginally where the monthly reward is best turned to cash.