Your post was very timely given all the talk about now about a...

Your post was very timely given all the talk about now about a recession in the USA.The AFR just now reports the market is betting on an 80% chance of a 50pb rate cut in September whereas a week ago it was 12%.

The AFR also pointed out “since the 1970s the S&P has typically fallen by 23% on average in the first 200 days or so following the first rate cut.” At one stage last night the VIX the fear index was up 50% and is now nearly double what it was 3 weeks ago.

While POG ended up falling last night and may fall further if the stock market continues falling, which is typical eg happened in 2020, 2008, etc, historically the POG relatively quickly reverses direction and rises significantly above recent previous highs.

Its times like this where having a lot of cash on the sidelines is good to take advantage of market falls. But when to use it is tricky.

We may be in for a volatile time over the next few months maybe until even the end of 2024 or longer for gold, bonds, commodities and equities.

I expect gold equities will see further falls, possibly big, next Monday and further falls in August if equities continue to fall. It’s unclear how far POG will fall in the next few weeks if equities continue to fall significantly but POG and gold equities may rebound quickly especially if the Fed does cut rates by 50bp in early September.

I am actually excited by current developments even though in the very short term POG and gold equities may fall a lot - great time to pick up bargains and to have a significant exposure to gold and gold equities especially with SPR having a great deposit with hopefully much more gold to discover.