Specialising in Bitcoin, Gold and Digital Assets

ByteTree Asset Management

Investment Manager specialising in bitcoin, gold and digital assets

CEO, ByteTree Asset Management

Commodities

My&nbsp;<a href="https://bytetree.us3.list-manage.com/track/click?u=a4a4461fba9ee073aaefd6019&amp;id=7ca0f74a25&amp;e=7c019babf2" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://bytetree.us3.list-manage.com/track/click?u%3Da4a4461fba9ee073aaefd6019%26id%3D7ca0f74a25%26e%3D7c019babf2&amp;source=gmail&amp;ust=1670110951577000&amp;usg=AOvVaw3jxUU5g3yw_bwodMv1czmC" rel="noopener">recent piece covered gold</a>, where I have been concerned about the premium to index-linked bonds. I fear a 2020-type softening where gold struggles. The monetary environment has changed, and markets are risk-on. Surely that’s not great for gold? At least in the short term.
Gold at risk?
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/313/640/original/image_114441246151670024616020.png?1670024617" class="editor-image img-responsive" data-smartkarma-image-id="313640"></figure>
Source: Bloomberg
Using an actual 20-year TIPS that redeems in 2042, the gap becomes clear. A switch from gold to TIPS keeps you on the same trajectory, just that TIPS currently offer better relative value. Notice how it jumped more than gold yesterday.&nbsp;
<h3>Gold against a real TIPS</h3>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/313/641/original/image_968976493161670024661852.png?1670024663" class="editor-image img-responsive" data-smartkarma-image-id="313641"></figure>
Source: Bloomberg
But it’s an illusion because gold’s recent rally in dollars merely reflects the falling dollar. Gold in GBP (blue) isn’t going up. In case you hadn’t noticed, the pound is on a tear.&nbsp;
<h3>No gold rally in pounds</h3>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/313/642/original/image_641715535171670024910319.png?1670024911" class="editor-image img-responsive" data-smartkarma-image-id="313642"></figure>
Source: Bloomberg
Then my friend Dominic Frisby sent me this.
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/313/643/original/image_607174608181670024934302.png?1670024936" class="editor-image img-responsive" data-smartkarma-image-id="313643"></figure>
Source: Twitter (I think)
I love this sort of thing. Could it be that there’s some massive revaluation ahead? It is possible, but I can’t see one that would shoot past TIPS because a massive dollar weakening would see long-term inflation expectations rise. That would benefit TIPS too.
Furthermore, gold was fixed or pegged back in 1931 and 1969. Today it is free as a bird, so you’d have to believe in price suppression to buy that story.
But you never know – a great observation that something big lies ahead. I certainly agree with that. ByteTrend Exchange Traded Funds Briefly on ByteTrend ETF screening. We have taken it down from the non-premium site, but you can see it for free using this link.&nbsp;
The ETF universe has seen the red skies retreat, which means fewer ETFs are falling, and some decent trends are emerging as the dark blue grows.
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/313/644/original/image_410884539191670024969341.png?1670024971" class="editor-image img-responsive" data-smartkarma-image-id="313644"></figure>
Source:&nbsp;<a href="https://bytetree.us3.list-manage.com/track/click?u=a4a4461fba9ee073aaefd6019&amp;id=2f32706eea&amp;e=7c019babf2" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://bytetree.us3.list-manage.com/track/click?u%3Da4a4461fba9ee073aaefd6019%26id%3D2f32706eea%26e%3D7c019babf2&amp;source=gmail&amp;ust=1670110951578000&amp;usg=AOvVaw2FMKWGaNHKmie9Jp5iKmL8" rel="noopener">ByteTree Terminal</a>
Which sector ETFs look strong?&nbsp; Solar, materials, Cleantech, Quality.&nbsp; Which sector-ETFs look weak? FinTech, Blockchain, Cloud, Cannabis, space, betting, tech. Trends continue for longer than we generally expect. Currently, the market is rewarding real companies with strong cashflow. It is ignoring the speculative, which is the opposite of early 2021. You can see the screening tool&nbsp;<a href="https://bytetree.us3.list-manage.com/track/click?u=a4a4461fba9ee073aaefd6019&amp;id=db535673ef&amp;e=7c019babf2" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://bytetree.us3.list-manage.com/track/click?u%3Da4a4461fba9ee073aaefd6019%26id%3Ddb535673ef%26e%3D7c019babf2&amp;source=gmail&amp;ust=1670110951578000&amp;usg=AOvVaw22Y4Rf26_q2RzNx8vhNn-q" rel="noopener">here</a>, which is still under construction. Regardless, it is a powerful tool and has been&nbsp;<a href="https://bytetree.us3.list-manage.com/track/click?u=a4a4461fba9ee073aaefd6019&amp;id=e3184499a9&amp;e=7c019babf2" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://bytetree.us3.list-manage.com/track/click?u%3Da4a4461fba9ee073aaefd6019%26id%3De3184499a9%26e%3D7c019babf2&amp;source=gmail&amp;ust=1670110951578000&amp;usg=AOvVaw1CNR-qWx2BfgDL6q6ABTdJ" rel="noopener">amazing in crypto</a>. I screen against BTC, but you can also do USD or ETH or our own ByteTree Crypto Average (BCA).&nbsp;

My&nbsp;recent piece covered gold, where I have been concerned about the premium to index-linked bonds. I fear a 2020-type softening where gold struggles. The monetary environment has changed, and markets are risk-on. Surely that’s not great for gold? At least in the short term.
Gold at risk?

Source: Bloomberg
Using an actual 20-year TIPS that redeems in 2042, the gap becomes clear. A switch from gold to TIPS keeps you on the same trajectory, just that TIPS currently offer better relative value. Notice how it jumped more than gold yesterday.&nbsp;
Gold against a real TIPS

Source: Bloomberg
But it’s an illusion because gold’s recent rally in dollars merely reflects the falling dollar. Gold in GBP (blue) isn’t going up. In case you hadn’t noticed, the pound is on a tear.&nbsp;
No gold rally in pounds

Source: Bloomberg
Then my friend Dominic Frisby sent me this.

Source: Twitter (I think)
I love this sort of thing. Could it be that there’s some massive revaluation ahead? It is possible, but I can’t see one that would shoot past TIPS because a massive dollar weakening would see long-term inflation expectations rise. That would benefit TIPS too.
Furthermore, gold was fixed or pegged back in 1931 and 1969. Today it is free as a bird, so you’d have to believe in price suppression to buy that story.
But you never know – a great observation that something big lies ahead. I certainly agree with that. ByteTrend Exchange Traded Funds Briefly on ByteTrend ETF screening. We have taken it down from the non-premium site, but you can see it for free using this link.&nbsp;
The ETF universe has seen the red skies retreat, which means fewer ETFs are falling, and some decent trends are emerging as the dark blue grows.

Source:&nbsp;ByteTree Terminal
Which sector ETFs look strong?&nbsp; Solar, materials, Cleantech, Quality.&nbsp;  Which sector-ETFs look weak? FinTech, Blockchain, Cloud, Cannabis, space, betting, tech.  Trends continue for longer than we generally expect. Currently, the market is rewarding real companies with strong cashflow. It is ignoring the speculative, which is the opposite of early 2021.  You can see the screening tool&nbsp;here, which is still under construction. Regardless, it is a powerful tool and has been&nbsp;amazing in crypto. I screen against BTC, but you can also do USD or ETH or our own ByteTree Crypto Average (BCA).&nbsp;  

Gold

Farewell to Fleet Street