Chicken Little First Dates: Shorting Gold

On August 11, 2016, Chicken Little broke up with Treasury bonds, and began looking for love elsewhere. 

Consistent with his "Investment Rules," this post describes the third of three first dates for Chicken Little. 

Date #1 was buying US stocks, Date #2 was shorting non-US stocks, Date #3 is shorting gold.  

Chicken Little sells gold short 

Shorting Gold is actually a rebound relationship

Chicken Little still fears a deflationary depression (Dow 20,000 notwithstanding). In a deflationary depression, Chicken Little expects people to sell gold to buy food and other necessities. 

Chicken Little has had a negative view on gold since 2011. That negative view was interrupted in February of 2016 (see post: Chicken Little buys gold). When interest rates appeared to start rising in July, Chicken Little looked for an opportunity to short gold and entered the position in October (see November 2016 positions). 

Chicken Little Bought Gold last Year
Chicken Little Shorted Gold in October 2016

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