The Agio Gold Sector Fund, officially licensed on June 1st, 2023, is expertly managed by Agio Capital Ltd. and advised by Legba Advisors Ltd. This fund presents a compelling investment opportunity in the gold market, utilizing the Agio Gold Sector Fund Monetary Model, which gives unique insight into how the Global Monetary System operates at the strategic level. The fund’s Monetary Metric signals – though less frequent than traditional technical indicators – generate outsized risk/reward opportunities for entire market sectors. Furthermore, the Agio Gold Sector Fund aims to optimize returns at each degree of trend – short, medium, and long-term – while accounting for systemic risk in the most comprehensive manner possible. This strategic approach positions investors to benefit from the dynamic nature of the gold market.
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Understanding Recent Headlines
Technology is changing our world in big ways, and it feels like we’re entering a new era. However, the basic rules of economics still hold true. The news is giving us mixed signals. Some reports are excited about a possible “Commodity Super Cycle” (CSC), which means a long period where demand and prices for raw materials are high. Others are talking about a “New Economic Super Cycle,” suggesting a long phase of economic growth.
It’s important to remember that the last big rise in the prices of raw materials, or the CSC, happened in 2008. At that time, the prices of metals, when adjusted for inflation, saw their largest increase in a century. This high point was almost reached again with a smaller increase in 2011. The next big event was the massive financial bubble, the largest ever, which reached its peak ten years later
Seasonal trends in the stock market have been fairly predictable, with peaks often occurring in January, mid-year, and sometimes a rally into September. This year, the expected September rally was postponed to October.
Two significant events have caught our attention: the inversion of the Yield Curve and the occurrence of a Hindenburg Omen. Historically, every Yield Curve inversion since 1857 has been followed by a recession. While not every Hindenburg Omen leads to a market crash, every crash has been preceded by one. The recent surge in the “Magnificent Seven” tech stocks was impressive but appears to be waning. The S&P 500 reached a high on October 17th, and we’re now seeing a modest correction that could unfold over the coming weeks.
Currencies: The Dollar and Beyond
The US dollar experienced a sharp drop to the 100 level on September 27th, possibly due to escalating constitutional concerns. Some speculate that a Trump victory could propel the S&P 500 to unprecedented heights, but we believe this optimism is already reflected in the market.
Typically, the leading currency tends to strengthen after a financial bubble bursts. Amidst the buzz around commodity booms, the Canadian dollar made gains from early August to a few weeks ago but has since pulled back slightly.
The Dollar Index (DXY) is a useful indicator of global credit conditions, with a rising trend suggesting a contraction and a falling trend indicating expansion. We’ll explore this further in our discussions.
Gold: A Shining Opportunity
We’re relieved to see lithium no longer mistakenly categorized as a “Precious Metal,” as its price has significantly decreased. Gold, on the other hand, often sees an increase in its real value after a financial bubble. We use the Gold/CRB ratio to gauge this, as the CRB index reflects mining costs, which have been dropping relative to the price of gold.
This ratio hit a critical low in 2022 and has since formed a five-month base. Last week, it reached a high, and while the weekly Relative Strength Index (RSI) suggests it’s somewhat overbought, a period of consolidation could be beneficial for gold investors.
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The Investment Advisor |
The Fund Manager |
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Kevin Price offers consulting services to international corporations, private clients, and financial institutions. He is the CEO of Legba Ltd., a financial consulting firm based in The Bahamas that provides investment advisory services and risk assessment across multiple jurisdictions. With over 30 years of experience in the financial services industry since 1988, Mr. Price has worked with major banks and firms like American Express, UBS, and Gonet. His career has given him hands-on experience in the U.S., Cayman Islands, and the Bahamas, specializing in corporate banking, trading, discretionary management, and investment advisory. He has held senior management roles in these regions. Mr. Price holds an M.B.A. in finance from the University of Virginia and a B.A. in Economics from the University of Michigan. He is licensed in the U.S., the Cayman Islands, and currently registered in The Bahamas.
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Agio Capital Ltd. is a registered fund management firm located in The Bahamas, specializing in investment management services. With a focus on strategic investment approaches, Agio Capital focuses on alternative asset classes, such as gold, cryptocurrencies and other commodities, providing clients with diverse financial solutions designed to optimize returns while effectively managing risks. The firm is committed to guiding clients through the complexities of the financial markets, ensuring they achieve their investment objectives. Leveraging extensive industry expertise, Agio Capital aims to deliver comprehensive support to a discerning clientele, including corporations, private clients, and financial institutions, fostering long-term financial success.
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