Passaic Partners is a majority employee-owned investment firm dedicated to providing liquid alternative investment solutions to long-only and hedge fund investors.

Our derivative based strategies provide tools for investors to efficiently gain exposure, improve returns, reduce volatility, and provide liquidity when needed most.


Is the Future More or Less Certain?

March 2024

Global markets continued their advance in March. The S&P 500 gained 3.10%, MSCI-ACWI gained 3.14%, US 10-year bond yields retreated by 1.17%, GSCI rose 4.73% (led by crude oil and gold), DJ Real Estate index was up 1.76%, and the US Dollar was up 0.32%. There was broader US equity strength with Cyclicals, Energy, and Materials benefiting from higher commodity prices.

Volatility remained subdued as the Fed signaled that rate cuts were firmly on the table. Greater predictability from the Fed led to a drop in 21-day realized volatility from 13.2 to 9.5. Implied volatility ("VIX") dropped from 13.4 to 13.0. ICE BofAML Move Index, the fixed income equivalent of the VIX, dropped by 20.8%. Put/Call Skew, the expectation of how options will perform in relation to their current price and an indicator of investor sentiment, remains at multi-year lows. This shows continued lack of fear of downside equity movement and...

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A Discreet Gold Rally

March 2024

  • Strong Defense
  • A Rally Without Volatility
  • More Volatile Hands

Gold has rallied 25% from its October 2023 lows and 40% from its September 2022 lows. This price improvement occurred despite persistent dollar strength, high real and nominal interest rates, and a Fed which has stopped hiking but has yet to initiate or commit to the idea of a proper cutting cycle (Chart 1).

Strong Defense

Gold has been playing aggressive defense, but not so aggressive offense. It has steadily reached new highs without the explosive moves we have come to expect. In fact, gold ETFs have been losing, not gaining, (open) interest during this impressive rally (Chart 2).

A Rally Without Volatility

Who has been pushing gold higher?...

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© 2024 Passaic Partners LLC is a Registered Investment Adviser based in Newark, New Jersey.