I started out today writing that the risk-reward didn’t favor gold longs so close to $4000 because the probability of profit-taking at or ahead of the big figure. That proved prescient as gold fell to $3962 from $3991 as part of a broad round of market selling.

However gold has quickly — and impressively — steadied and bounced back to $3983. That shows a strong willingness for the bulls to buy any dip and makes me slightly more optimistic that would could blow right through $4000. Gold still remains extremely overbought but yesterday Citadel’s Ken Griffin brought up a good point. He said that people are starting to view gold as safer than the US dollar, which he called ‘concerning’.

That begs the question: Do you view gold as safer than the US dollar?

I don’t think that’s a tough question to ask and as people ask it, the implication is obvious.

“We’re seeing substantial asset inflation away from the dollar as people
are looking for ways to effectively de-dollarize, or de-risk their
portfolios vis-a-vis US sovereign risk,” Griffin said.