In a recent interview with Liberty and Finance, Lobo Tiggre, the "Independent Speculator," offered a cautionary perspective on the gold market's current trajectory, raising concerns about a potential "waterfall event" that could trigger a sharp decline in prices. His analysis comes amidst a period of heightened market volatility and economic uncertainty, raising crucial questions for investors.
Tiggre, known for his deep understanding of precious metals and mining stocks, began by acknowledging the recent pullback in gold prices, attributing it to possible profit-taking after gold nearly touched the significant $3,000 mark. “We got within kiss distance of 3,000, a big round number like that,” Tiggre said. “It could be the sort of thing that ignites a flavor of the day off to the races… or it could trigger profit selling, which might be exactly what we’re seeing right now.”
Market's "Tipping Point" and Bitcoin's Role
Tiggre emphasized the unpredictable nature of the market, stating, "I can't tell you which it is. Nobody could. We're just going to have to watch this." He also highlighted the contrasting movement of Bitcoin, suggesting a potential correlation or at least an interesting coincidence that market observers should note. "Bitcoin's gone in reverse in a big way... it's an interesting coincidence," Tiggre noted.
He further pointed to the broader market's volatility, indicating a possible "tipping point." “My wolf whiskers are twitching here,” he said, “This is the market has been volatile… we might be at something of a tipping point.”
Mining Stocks: Selectivity Amidst Uncertainty
Regarding mining stocks, Tiggre stressed the importance of selectivity. He noted that while gold prices have risen, not all miners are benefiting equally, due to increased input costs and overly optimistic analyst forecasts. “You’ve got companies… they’ve seen huge increases in production and money… but they didn’t increase quite as much as the analyst expectations and then the stock price gets trashed. That’s crazy,” he explained.
This highlights the importance of due diligence and understanding a company's fundamentals beyond just the prevailing market sentiment.
Macroeconomic Factors and Potential Market Correction
Tiggre discussed the potential for a broader market correction, referencing factors like the inverted yield curve and the recent volatility in Bitcoin. He warned that a "liquidity event" could lead to selling pressure on gold, as investors seek to cover margin calls. "We could see some sales in gold right now because people need the money to pay off their margin clerks on their Bitcoin," Tiggre said.
He also addressed the "Fed put" phenomenon, where investors anticipate the Federal Reserve intervening to support markets, which could counteract a potential sell-off. Tiggre emphasized the importance of having cash on hand to capitalize on any potential buying opportunities. "I'm in powder accumulation mode," he revealed. "If we get a big liquidity event and a big buying opportunity, I will be glad to have cash ready to deploy."
Fiscal Policy and Gold Revaluation: A Complex Picture
Tiggre provided insights into the Trump administration's fiscal policies and the possibility of a gold revaluation. He acknowledged that the administration's efforts to cut spending have exceeded his initial expectations, but he remains skeptical about their long-term impact on the federal budget. "The inflationary agenda is there, that's real, and the savings that might help that are still hypothetical," he stated.
Regarding gold revaluation, Tiggre noted that while it's a possibility, it's not a certainty. He referenced comments by Scott Besson, who indicated that revaluing gold in Fort Knox was not the administration's primary focus. "That's not what I had in mind," Tiggre quoted Besson as saying. He added, “I don’t think Doug or Rick Rule or you or me, none of us know if this is going to happen.”
Tiggre's interview underscores the uncertainties facing the gold market and the broader economy. His analysis suggests that while gold remains a valuable asset, investors should be prepared for potential volatility and a possible "waterfall decline." His emphasis on selectivity, strategic investing, and the importance of holding real money provides a prudent approach to navigating these challenging times.
Watch the full interview:
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