TheBRRR’s Thoughts

Hope everyone enjoyed the long weekend.

Gold is an asset stealing the show today - as the precious metal breaks out above $2200 per ounce for the first time ever.

It has moved with inverse correlation to interest rate expectations, and Friday’s dovish guidance from the Fed only exacerbated the recent price rally.

Gold has worked fairly well as a hedge against dollar debasement over the years, but it hasn’t performed nearly as well as you’d expect given the rapid debasement since 2020, while our preferred asset bitcoin with its “digital gold” narrative is one of the best performing assets on most timeframes.

We’re still closely watching the dollar as it continues to march higher despite the dovish Fed guidance. The strength in the world’s reserve currency is presenting headwinds for risk assets, but it appears to be running into resistance at current levels.

Gold Prices Surge To Record High Amid Rate Cut Speculation

WHAT HAPPENED:

• Gold prices reached new heights, with spot gold trading at $2,235.59 per ounce and U.S. gold futures at $2,257.80.

• This surge is driven by anticipation of a U.S. Federal Reserve interest rate cut in June and gold's status as a safe-haven asset.

• The Fed's key inflation gauge for February rose by 2.8% year-on-year, suggesting a cautious approach before potential rate cuts. Despite holding rates steady in March, the Fed anticipates three cuts this year.

• Gold's appeal increases as interest rates drop, offering an attractive alternative to bonds and fixed income assets in a low-rate environment.

• Increased demand from overseas, especially in China, where poor real estate performance and a weak economy have driven investors towards gold.

• Central banks globally are also boosting their gold reserves, fueled by geopolitical concerns, domestic inflation, and the U.S. dollar's decline.

WHY IT MATTERS:

• Investor Strategy: The expectation of Fed rate cuts has bolstered confidence among market speculators, making gold a hot asset.

• Global Influence: China's economic challenges and the role of central banks highlight gold's significance in global financial stability and diversification strategies.

• Economic Indicators: The Fed's inflation gauge and its rate decisions serve as critical indicators for the broader economic outlook and its impact on asset classes like gold.

Zerohedge

X to Unveil Grok-1.5 Next Week, Promises GPT4-like Performance

Just when the tech community started wrapping its head around Elon Musk's Grok-1 going open-source, xAI dropped a bombshell: Grok-1.5 is on the horizon, promising an even more powerful AI experience. Here’s a crisp summary of what’s brewing:

WHAT HAPPENED:

• Upgraded AI Model: xAI, led by Elon Musk, unveils Grok-1.5, an enhancement over the already impressive Grok-1, known for its vast knowledge and assisting capabilities inspired by "The Hitchhiker's Guide to the Galaxy."

• Enhanced Capabilities: Grok-1.5 boasts superior reasoning and problem-solving skills, narrowing the gap with leading AIs like OpenAI’s GPT-4 and Anthropic’s Claude 3, though still trailing behind Gemini 1.5 Pro’s mammoth context window.

• For the X Platform: Musk eyes Grok-1.5 to fuel xAI’s chatbot on the X platform, challenging the prowess of ChatGPT with an aim to lead the AI race with the future Grok-2.

WHY IT MATTERS:

• Benchmark Mastery: Grok-1.5 doesn’t just outdo its predecessor; it shows significant prowess across major benchmarks. It shines in math and code generation tasks, indicating a leap in AI's ability to tackle complex problems.

• Impressive Stats: Achieving a 50.6% score on the MATH benchmark, 90% on GSM8K, and 74.1% on HumanEval, Grok-1.5 proves its mettle in understanding and solving intricate tasks. It's a powerhouse with an 81.3% score on the MMLU benchmark, indicating a solid understanding across varied tasks.

• HumanEval High Score: In the HumanEval benchmark, Grok-1.5 beats almost all rivals except for Claude 3 Opus, underscoring its advanced code generation and problem-solving capacity.

LOOKING FORWARD:

• Grok-2 Anticipation: With Elon Musk hinting at Grok-2 surpassing "current AI on all metrics," the tech world is buzzing with anticipation. According to tech consultant Brian Roemmele, Grok-2 is poised to outshine competitors across the board.

CNBC

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The BRRR is meant for informational purposes only. It is not investment advice. Please consult with your investment, tax, or legal advisor before making any investment decisions.ll