"Everything you need to know about gold"
GOLD LEAVES SILVER BEHIND
Complicated and convoluted technical analysis, inflamed fundamentals, never-ending last chance warnings and all the supposed evidence to the contrary – there is nothing that justifies the ultra-bullishness of silver stackers and investors. We might say “gold leaves silver behind, waiting, and in the dust.
NEW HIGHS FOR GOLD?
All of the talk about new highs in the gold price seem to be wishful thinking unless one is focused on only nominal prices. Below is a chart of monthly average closing prices for physical gold since the summer of 2020…
GOLD SINCE 2020
When gold was trading above $2000 oz. in the summer of 2020 the yellow metal was receiving its fair share of attention. After a low point just under $1050 oz. in December 2015, the gold price had doubled in four and one-half years and bullish optimism was at fever pitch.
GOLD HEADLINES – UP $300
Advisors and marketers are ecstatic:…
“Nothing will be able to stop gold when it breaks to a new all-time high” or “On the cusp of a breakout where gold can go up to $5000” are two examples of recent exclamations about prospects for higher gold prices. The euphoria can be contagious.
Gold’s nasty divorce from the U.S. dollar was finalized in August 1971 when President Richard Nixon suspended any further convertibility of U.S. dollars into gold by non-U.S. citizens. That action removed any remaining links between the dollar and gold.
Without convertibility, any official price for gold became meaningless. At that time, the official U.S. dollar price of gold was raised from $40.00 oz to $42.50; but nobody paid much attention.
GOLD, INFLATION, AND THE FEDERAL RESERVE
Below are my comments and answers to various questions about gold, inflation, and the Federal Reserve. They are “for the record” so to speak, and are meant to be taken literally and specifically…
DEMAND FOR GOLD
As investors and others continue to jockey for position in order to announce that “the bottom is in for gold” or that “gold owners received an early Christmas present” or “crypto failures will translate to higher prices for gold”, it is clear that most of them are thinking that increased demand for gold will drive its price higher.
That is not the way it works.
GOLD AND THE NORMALCY BIAS
We think we know most (if not, all) of what we need to know about gold. Investors do their research and marketers spin their best yarn(s). Support is offered with an amazing array of fundamental and technical factors on display for all to see. But what are we not seeing?
GOLD PRICE DECLINE – $600 POSSIBLE?
Over the past couple of months, since the posting of my article Gold Charts – $1450 the price of gold has done nothing to indicate a change in direction or reversal of any consequence.
GOLD CANNOT EXCEED INFLATION’S EFFECTS
Making such an absolute statement may sound bold; even arrogant to some. There is, however, perfectly sound fundamental reasoning underlying the claim. So before you dismiss it out of hand, hear me out.