Don’t Follow Fake News Or Fake Analysts In Metals

I think we have all seen many episodes of fake news in the media when it comes to politics. However, what is even more pervasive is fake news in financial analysis. And, I was urged to write this quick public note to set the record straight.

I have railed for years against those analysts who have pointed to news events to explain what has happened in the market, especially as an excuse for something that happened which they did not foresee. I view such “analysis” as only being used as a scapegoat for the reason they did not foresee a market move.

The most glaring example is when the market dropped from 2011 to 2015 when most did not see it coming, and analysts claimed that the market was manipulated to drop during that entire time rather than recognize it was a standard correction they did not foresee coming.

But, what is worse is to use news events in a dishonest manner to try to explain why a particular bullishly inclined analyst did not see a correction coming.

A member of my trading room sent me a video which just was made by a “cycles” analyst. Within this video, the “analyst” claims that the reason gold dropped from the highs made earlier this year was because of the liquidation of the Vanguard Precious Metals and Mining Fund.

But, as I alluded to earlier, this is simply fake news and is conveniently and dishonestly used as an excuse by this analyst. The fact is that Vanguard made its announcement on July 27^th 2018.

And, as you can see from the chart, the announcement made by Vanguard was closer to the bottom of this decline in 2018 than the top of this decline.

At the time of the announcement, I was even interviewed by Kitco regarding this liquidation, and noted that we see liquidations such as these closer to bottoms than to tops.

I have said this so many times over the years. There is much information being presented to you out there by analysts. However, it is your job to filter this analysis through a prism of truth, as so much of it fails that test. At the end of the day, analysis should not only pass the simple test of honesty, but of intellectual honesty as well. Sadly, very little satisfies those tests today.