HardAssetsInvestor

Mike Norman, Hard Assets Investor (Norman): Hello everybody, and welcome to HardAssetsInvestor.com. I'm Mike Norman, your host. My guest returning today is Todd Horwitz, who is the chief strategist at Adam Mesh Trading. Todd, thanks a lot for coming back on the show.

Todd Horwitz, chief strategist, Adam Mesh Trading (Horwitz): Always great to be here.

Norman: I think you were on about a year ago. You made some pretty bold calls. I think you were a little bit bearish on gold and commodities at the time. That’s worked out pretty well. How do you see things right now?

Horwitz: Well, if it works, don’t change.

Norman: Stay with it.

Horwitz: I think that gold is still going lower. I think we’re in a downtrend.

Norman: Why is that?

Horwitz: Well, first of all, gold, in my opinion, is not a hedge against anything. People want to say, “Well, it’s a hedge against the market, a hedge against inflation, a hedge against anything.” To me it’s nothing.

Norman: Really?

Horwitz: It’s just another commodity. That’s my view. It’s like soybeans, oil—doesn’t matter. It trades basis. The technicals of the chart show me that we peaked up at $1,937. And we’re now in a down slope. So, if we’re going down, I’m not going to try to change the trend. The trend is lower.

Norman: You must have a target, though. Where do you think it could go, let’s say, in the short term? Do you think we can break down below $1,500?

Horwitz: I think we can. I think the first test will be the $1,529, which is the most recent low. I think we get a little bounce off of there. But I think we maintain the down composure. And I think we get into the $1,400s. I think we get probably to the $1,440-$1,450 handle.

Norman: So you don’t buy this idea that gold is another currency, and it’s a hedge against all kinds of calamity?

Horwitz: No.

Norman: You just don’t buy that?

Horwitz: The only difference between soybeans and gold is you can't eat gold. It’s nothing.

Norman: Well, it’s a little chewy. It’s a little tough.

Horwitz: To me, it’s another commodity that trades. It has no value unless you can find a buyer. Paper money, fiat currency can be exchanged. You can't always exchange gold bars.

Norman: Now how about the story about central banks pumping up money and printing money? That hasn’t really worked out, by the way.

Horwitz: I agree with you. The printing money has not worked out. However, while all the fear and all the things that have been going on, what has happened to the price of gold?