Shorting Gold

Published on
21 August, 2018
Gold, Macro, Trading
15 minutes
Asset class

Shorting Gold

Featuring Tony Greer

Tony Greer, founder of TG Macro, explains why he is betting against the GLD ETF despite being a long-term holder of physical gold. He also discusses his overall macro outlook, and explains he sees more upside for the dollar, in this interview with Justine Underhill. Filmed on August 15, 2018.

Published on
21 August, 2018
Gold, Macro, Trading
15 minutes
Asset class


  • DR

    David R.

    24 11 2018 20:59

    0       0

    Actually, both gold and dollar are little changed compared to Aug 14 when this was recorded. As for the US economy, nearly all of the key forward-looking data has rolled over and the US economy looks sick, especially in the credit market (where recessions begin). Stocks are down. Most but not all EM currencies have risen, some substantially, since this video was recorded, and specific EM bonds in local currency have been the stellar investment since then.

  • YW

    Yowshi W.

    2 10 2018 14:46

    0       1

    I would buy bitcoin and not gold as store of value

  • SB

    Stewart B.

    2 9 2018 20:20

    0       0

    Gold doesn't look too bad in Euro and Pounds. In Turkish Lira it's a winner. As Mike Green says, 'It's a testable hypothesis'.

  • JM

    James M.

    26 8 2018 14:58

    0       0

    $200 inflation adjusted ....what would that be a triple moca mata latte fratty creamfly floffy top coffee... for an 1/4 ounce of the yella???

    I,ll take it if i,m still alive lol

  • TT

    Tim T.

    24 8 2018 19:41

    9       1

    RV should track and readily display the P&L of these people being interviewed with trade ideas they are pitching. A simple metric like total % return on their trade recommendations would be useful.

  • DR

    David R.

    24 8 2018 14:54

    0       0

    Okay but why is the dollar so weak against many FX for 2 years. Actually for 33 years since plaza accord. I remember when a swiss franc was worth less than an American quarter. Now the dollar is worth less than one franc. Very sad.

  • DR

    David R.

    24 8 2018 14:53

    2       0

    Okay but why is the dollar so weak against many FX for 2 years. Actually for 33 years since plaza accord. I remember when a swiss franc was worth less than a quarter not so long ago. Now the dollar is worth less than a dollar. Very sad.

  • OD

    Orin D.

    24 8 2018 07:34

    1       0

    I know people hate Gold bears but he makes a lot of great points. The past few months have not just been a USD story, Gold is down against most of G10

  • RT

    Rune T.

    23 8 2018 15:42

    3       0

    I guess everyone's base currency is USD... Gold is doing just fine in my currency, I could not care less about what it does in USD.

  • ss

    sid s.

    23 8 2018 13:06

    2       1

    very poor understanding of the gold trade.

  • BH

    Ben H.

    23 8 2018 05:38

    9       0

    There seems to be a bit that needs work with the "analysis", first being that its not absolute rates but REAL rates that influence demand for gold on a relative basis (ie taking into account inflation), therefore second wrong assumption is that inflation coming in by itself should have sent gold higher... which it has not proven to be correlated with. We have now returned to negative real rates across the curve and this has empirical evidence to show that prolonged (3-6mth) of negative real rates leads to spikes or higher plateaus in the gold price.
    The attention brought to the now 72% correlation with the CNY is important but I think the speculation around China selling gold is spurious... but in any case they don't need to sell it for the price in USD to come down, they just keep buying at the same CNY price (lower USD price in weakening CNY environment) which looks like 8200-8400 so hence why the correlation is 72 vs say. Have the Russians stopped buying gold?
    The fact that CTAs and other specs are the most short ever, whilst bullion banks (commercials) are close to neutral (not a natural position for them due to hedging needs), is actually bullish... if you go around shorting everything that every HF and trader is short i think its harder to find more sellers than it is to find the buyers that he refers to.
    Anyway, enjoying understanding the positioning in these comments. Thanks for the ideas

  • DT

    Dave T.

    23 8 2018 03:58

    3       0

    There is a possibility of another explanation. Capital flight from China.
    I loved there for 20 years, and know that any Chinese person of means does not trust their government, even when they are part of it. Crypto has effectively shut down, but the SHFE with it's RMB/Oil/Gold contracts offers a potential conduit. Gold is stable in RMB terms. Falling in USD, because, possibly, any party buying in RMB is now selling in USD.
    It is a possible explanation.
    It will be interesting to see what happens next month when the first RMB denominated oil futures contract matures.

  • BC

    Burton C.

    22 8 2018 19:13

    13       1

    I guess it says something for this site that all comments have been so respectful of Tony's views and have steered away from any personal attacks to such an emotional asset. But I have to say describing gold as a "barbarous rock" that's going to $200 while simultaneously saying it with bug eyes did it for me. First off Keynes didn't call gold a barbarous relic, he called the gold standard a barbarous relic. And why Tony just go all the way and call it a "pet rock".
    This is a USA centric perspective. If one has ever been to the markets in Istanbul, Bangkok or Dubai one knows the inherent demand there will always be for gold, that's not going away. To suggest a $200 price is another way to say there will be no primary gold production and no industry itself. These are the type of bold statements we hear of bottomless markets in the vicinity of ultimate bottoms.

  • BV

    Brad V.

    22 8 2018 14:06

    1       2

    I thought this was a great interview. I agree with some of the posts while other comments are probably best left unsaid. Each to their own! 'some' of the posts I agreed with provided good insight to ‘understanding gold’. I thought Tony was on point and provided enough detail for me to confirm my current thesis. My comments are designed to explore gold and how it might be used as a benchmark in which to gauge the ebbs and flows of excess liquidity. What drives the demand in gold? Some have already commented so thank you. The Bank of International Settlements reports that the most traded currency by value is US Dollars (87%, 2016). Tony highlighted that gold cannot earn a real interest rate of return; however, a real interest rate of return can be found in the US Dollar. Therefore, maybe the dollar related liquidity dynamics has an important role to play in the pricing of gold? If the price trends of gold are defined by the demand of dollars then what happens when the demand of dollar rises but the supply of liquidity falls? Or, if the demand of dollars fall and we have an effective supply of dollar liquidity e.g. expanding and creating excess liquidity? How does the price of gold move then? If I look at what might drives liquidity conditions 1) US banking system balance sheets 2) velocity of banking system liquidity 3) US real interest rates 4) US Dollar Index I tend to agree with Tony. That is my view until price and market structure tells me otherwise….my comments derived from another smart investor’s work and strategy.

  • TH

    Timo H.

    22 8 2018 10:38

    10       0

    I gave the video a thumb-up, but will take the other side of the trade. Gold is becoming a highly political play, and its outcome will be decided somewhere else than in the portfolios of millennial investors. The most powerful adversaries of the Dollar are accumulating their gold positions very rapidly. They actually may be simultaneously short the futures market and long the physical metal.

    According to Jim Grant, the price of gold follows the formula "1 / CentralBankCredibility". Now that the global de-dollarization has started and simultaneously the U.S. deficit spending is skyrocketing, the credibility of the Fed is facing its toughest test ever. I would not dare to short gold now. All it takes is a small sign of weakness from the Fed to change the narrative to be extremely bullish for gold.

  • GM

    Gregor M.

    22 8 2018 07:53

    7       0

    Peak gold was before negative rates.

  • DY

    Dmytro Y.

    22 8 2018 05:40

    4       0

    Tony made quite logical argument. He is in a camp of R.Pal, Brent, who see Dollar going higher.
    meantime his track records: some time May-June he was bullish oil, oil is more or less same levels or bit lower today.
    in July he is bullish FCX. FCX fell substantially after he suggested buying it (as copper went down).
    so i am not convinced this trades this year will play out so well so quickly given his 2 earlier recommendations. all depends on DXY rally or not.

  • RM

    Ross M.

    22 8 2018 05:17

    1       0

    Another tick for the bullish Gold case should've recorded this 4 months ago. Plenty of other stuff to short TSLA comes to mind. Monetary Metals pay yield on Gold in Gold and the Kinesis money platform will soon be running paying a yield in Gold he needs to do more home work.

  • JM

    John M.

    22 8 2018 03:44

    6       0

    Tony is expecting more speculative funds to short gold driving the price lower. Last week Fred Hickey tweeted , "...record, outta-this world Large spec gold short position: Approx 45% more short contracts than at Dec 2015 bottom at $1050."

  • ss

    sid s.

    22 8 2018 02:30

    4       0

    China, Russia Turkey and others are buying gold by the tons . Germany, Austria , Hollande and France all repatriated their gold. a new global financial system is being negotiated as an alternative to the dollar centric order, and gold will be big part of it. even the state of Texas and Utah are accumulating gold.

  • DW

    Daniel W.

    22 8 2018 01:46

    6       5

    I love this. Anybody talking about shorting gold on RVTV, be sure to expect at least 50% thumbs down. As long as that holds true I am a happy short on gold.

  • AS

    Alan S.

    22 8 2018 01:43

    6       0

    As memory serves, this is the gentlemen who was shouting from the roof tops to buy Freeport-McMoRan; as well, easy pickings in shorting SOCL recently. FCX has something in the range of over 20 million ounces of gold, yet it was a buy according to him, seems odd given this display of thought. Maybe his time frame has changed, or outlook on FCX is different now than it was a month (give or take) ago. Hard to imagine though the average Costco receipt will be higher than an ounce of gold.

  • GO

    Gary O.

    21 8 2018 23:24

    3       0

    We shall see who is the winner and who is the loser in the next couple of years.
    Good luck to all!

  • NI

    Nate I.

    21 8 2018 21:42

    3       1

    I don't see gold selling below the all-in extraction price for an extended period. $200 would be the biggest gift from Mr. Market in my investing lifetime. I would be backing up my truck long before $200.

  • dw

    douglas w.

    21 8 2018 20:46

    4       0

    Trump will open his yap to talk dollar down.
    China continues to devalue to take the edge off any tariffs that are placed on them, Trump will be infuriated that net effect is too much dollar strength ultimately hurting U.S. Also, it seems he seeks a continuation of low interest rate environment so I expect more tweets about Powell not being "cooperative" in the near future.
    I think a small rally to 1225-1250 will happen first. Seasonally gold rallies into the fall with India and China holiday and wedding season demand taking place. Longterm, I agree with Brent Johnson from Santiago Capital on his dollar strength feedback loop, but I think it will take time to play out.
    Also, had a nice conversation w/ a few millenials about their interest in gold, primarily because they got burnt on bitcoin and crypto and have begun to look into gold as they begin to question- what is real money?

  • CB

    C B.

    21 8 2018 18:38

    1       1

    It feels as though the timeframe for this view is a year or so. Over a longer time frame gold should be great, especially in nominal terms!

  • WS

    William S.

    21 8 2018 17:47

    20       1

    Tony says he doesn't see where the buyers will come from at this juncture. Really? Buying in China and India (among other EM countries) has skyrocketed during this recent pull back. I can't see where the sellers will come from, given that COMEX gold, iirc, hit an RSI of 14 on the very day this segment was taped. I strongly suspect we'll look back in six months and see that this "short gold" idea was delivered to RV viewers on the very day gold bottomed in this current trading cycle.

    And gold sinking back to $200/oz? That's crazy talk. Batshit crazy talk.

  • JM

    Jason M.

    21 8 2018 17:28

    6       2

    Let's be fair to Tony - he is a victim of the Trump Banana Republic rally

  • MC

    Minum C.

    21 8 2018 17:21

    2       0

    It is unclear from the information presented whether Tony is net long or net short gold. He said he owns physical gold and silver, and he is short GLD. So he is apparently long silver, but we don't have enough information to determine if he's net long or net short gold.

    Personally I think physical gold should be allocated as a percentage of one's net worth, whereas a gold related security should be allocated within the context of one's financial assets. Tony seems to acknowledge the difference in this video, and I think for most people it would be helpful if he were to discuss allocations to each.

  • MB

    Markus B.

    21 8 2018 17:02

    20       0

    Everybody that has the courage and puts his head on the block in public with a trade idea deserves respect. However, based on the shallow rationale presented I would happily position myself on the other side of this suggested trade.

  • JV

    Jan V.

    21 8 2018 16:51

    1       0

    I wonder how many gold mines will keep operating when gold goes below 1000 dollar? I know gold isn't consumed like other metals (you have a ever growing stock). Still i suppose that removing 1000 ton (or more) of gold production on a yearly basis would have a big impact.

  • NO

    Neil O.

    21 8 2018 16:34

    14       0

    I want to like Tony's videos but I find his thinking a little superficial and below the usual standard on RV. There are also too many factual inaccuracies (eg "Turkey is smack in the middle of Europe". It is not. A small part of Turkey is on the edge of Europe, while the majority is in Asia). He also seems unaware of the large purchases of gold bullion by the Chinese and Russian central banks, which is ongoing. Russia has just completed selling all its UST holdings for bullion. There is something much bigger going on in the gold market, which is really tough to work out, and goes way beyond a very US centric and chart based analysis, in my opinion. Of course, none of my comments mean he won't be right with his trade idea, but I doubt they will be for the reasons he states in this piece.

  • DC

    Darren C.

    21 8 2018 16:18

    1       0

    Gold peaked in 1980 when there were very high interest rates, and in 2011 when there were very low interest rates. Is it possible that the price of gold is not correlated with interest rates?

  • JL

    Jack L.

    21 8 2018 16:17

    0       0

    Is there a way to create separate paragraphs on here?

    Testing ctrl + enter on this one to see if that works...

  • JL

    Jack L.

    21 8 2018 16:16

    8       1

    Lol had to log on on my laptop just to type out a big comment...

    I am a big fan of Tony's and watch all his trade ideas, and I think his short and moderate term forecast sounds quite logical, but I wanted to offer strong disagreement and anecdotal evidence against his thoughts on young people and gold.

    I am 32 and have been involved in the real estate investing space, the crypto world, the internet marketing world, and have met a large number of wealthy 18-35 year olds, and I can't remember a single one that didn't own physical gold or believe strongly in physical gold as a wise thing to hold.

    Definitely there are many young people involved in crypto but in my experience most seem to consider it and gold complimentary.

    As far as Cannabis goes I think most Millennials (including me) used it in their youth along with doing lots of other dumb things, however with it being legalized in half the country and 'normalized' it has really lost the 'cool', 'transgressive' quality it had back in the day, and I think most successful Millennials view marijuana as a highly uncool, awkward remnant of the hippy era...

    So yeah, between the anecdotal and the fact that most smart people realize our countries are broke and will eventually have to default on or inflate away our debts, I know few people who don't see the value in gold as a store of value and as insurance against government idiocy.

    The only folks making the 'young people aren't interested in gold' arguments I've heard are all 45+ and while I understand how they are arriving at that conclusion i think its actually quite backwards.

    The only Millennials with money to invest are the intelligent ones who have already created decent wealth in life, and in my experience they tend to be pretty rational. I doubt there's many 'numismatists' among them so perhaps in that regard Tony is right, but I think the vast, vast majority either own physical precious metals or plan to at some point in the future.

  • CS

    CMC S.

    21 8 2018 15:14

    2       0

    While gold to 1050 or even 950 is something to remain open to, gold to a couple of hundred dollars is difficult to accept should the world as a whole not be in a deflationary death spiral. (Sounds like the $10 oil brigade of late 2015) . Gold remains insurance against central banks with a 100% failure rate of which the magnitude of the financial and social consequences stemming from their monetary mishaps grow ever larger.

    The next generation of meaningful buyers are not likely to be coming from the West but the East. I am also thinking that COMEX and LBMA's days are numbered.

  • SC

    Sean C.

    21 8 2018 14:57

    9       0

    Tony, I love your stuff. This one about rates influencing gold though seems oversimplified. It's not about rates, but it's about real rates. Gold can go higher with rates as long as the inflation rate is higher. Gold has gone up when rates have skyrocketed for this exact reason.

  • DL

    Dan L.

    21 8 2018 14:13

    2       0

    Who are CTA's? Or, what does CTA stand for? Did a google on it and I'm lost already with that one.. (referring to what he says at 6:30)

  • AH

    Andrew H.

    21 8 2018 13:50

    3       0

    While I could certainly see gold going down to $1050, going down to a couple hundred bucks sounds crazy. I would think we would need to see the us mkt fall by 80%ish for that to happen(which I think would probably cause gold to rally).

  • KK

    Kristian K.

    21 8 2018 13:35

    3       0

    Everyone seems to forget that Gold peaked the very day the SNB instituted the EUR/CHF floor in 2011. Owning any sort of traditional "safe haven" asset since then has been difficult given CBs essentially declared war on them.

  • GH

    Gary H.

    21 8 2018 13:14

    1       0

    I really didn't hear anything different here that the bears usually put forth. Kind of a tired story

  • TB

    Tim B.

    21 8 2018 13:08

    3       0

    Ok, I like and respect Tony. He's made some great calls. But I'm having trouble with this. IMHO, inflation psychology is starting to creep in. Trump has chastised the Fed for raising. COT looks like a short squeeze could be developing on top of seasonal demand. I understand the strong dollar thesis, and I wouldn't rule out a further decline, but RR seems....sketchy, no?

    Am I missing anything?

  • V!

    Volatimothy !.

    21 8 2018 12:51

    0       1

    Gold was down over 30% in 7 months in 2008, then it went up over 250% in less than three years to its peak. Monthly, weekly, and daily RSI are below 42, so I feel the best part of a gold short is over near term. I hope he’s right about $200 gold, that’s a real opportunity.

  • MM

    Mike M.

    21 8 2018 12:44

    0       0


  • JM

    Juanfranco M.

    21 8 2018 11:54

    12       0

    Where was this idea back in April whengold was 1350. I would feel very uncomfortable shorting gold after this pounding. Very risky trade at these levels usual from a technical analist

  • PA

    Pascal A.

    21 8 2018 11:25

    18       2

    Honestly, I don't watch trade ideas regularly because I seems to me that the quality of the content is quite mixed. I can imagine that the videos about the mental side of trading and technical analysis are quite valuable (however, I'm not very much into technical analysis) but some of the macro content shown on this format is clearly lacking sound analysis and in my opinion this video belongs to this group.
    First, like Chris D. pointed out the peak in the gold price was around mid 2011 while negative yielding bonds started to show up in mid 2014 and building in 2015. So it's a lag of 3 years. Moreover, the gold price was close to the level it is today when the amount of negative yielding securities rose fastest.
    Second, it seems to me that the correlation (not even speaking of the cause) between yields and the gold price was anything but clear when looking at longer term charts. Maybe it would be better to look at the correlation of real yields and the gold price.
    On average I'm very happy with the content that RV produces. There are some really outstanding interviews. So, I wonder even more why RV broadcasts macro analysis (and this is the field where RV claims to have a lot of expertise) with such obvious flaws. I wish someone would double check the content before it's released to the viewers.

  • JS

    Jason S.

    21 8 2018 10:57

    1       0

    There was technical support off the 1160 level, which is why it bounced. You can see that drawing resistance back to 2016 high. If that breaks, there's support around the 1130 zone. That's technical resistance dating back to the 2012 high. I wouldn't rule out a re-test of this resistance/ now support level before a massive short squeeze.

  • CD

    Chris D.

    21 8 2018 09:31

    7       0

    Filmed on August 15.. well, was'nt that the bottom from this rinse 'n repeat-cycle of the COT? Remember that everything is stretched right now, S&P500 (becoming the longest bull market cycle in history), DXY at 96, UST10-UST2: around 25 basis points, and gold sub 1200$. The consensus: long dollar, S&P500, short bonds, short gold.. A year from now? I believed the opposite will be true..