Gold Price - Where is it heading?

[Captain_Chaza]

Can you help me with that Capt?

Will do over the week-end

 

[ducati916]

Can you help me with that Capt?

So this is the Log chart.
It is also inflation adjusted.

So a component of your decision to hold gold must be a view on inflation going forward.

US debt:



The deficits are driven by tax shortfalls.

Interest payments on the debt:



At almost $1.2 Trillion dollars.

Debt/GDP as of June 2024



The issue therefore is: can the US maintain its current trajectory?

If no?

Then the options are:

(i) Default outright;
(ii) Default over time (inflation)
(iii) Revalue Ft Knox gold to reduce/eliminate debt;
(iv) Print paper dollars and repay all the debt

(i) This involves simply defaulting on all their debt. The USD is a debt created fiat currency, it goes to zero. The ensuing depression would be global and significant.

(ii) The most likely outcome. 99% probability. USD loses purchasing power over time.

(iii) Possibility. Every $5000oz in gold = $1T in debt. Note this is rising fast. It used to be $4000oz = $1T in debt.

(iv) Hyper-inflation (same as (i) USD is essentially zero.

In relation to (ii): real productive assets are also inflation hedges. We still need food, shelter, Ducati's etc. As these businesses take in inflated dollars, so the selling prices rise etc. The nominal stock price rises to reflect those higher earnings. Wages rise in nominal terms.
So in nominal terms, stock prices with productive assets rise. In real terms, nothing much changes.

Gold is money. You are replacing your fiat money with gold, not necessarily going all in on gold as an investment.

The problem is that we are at all time highs in any number of assets: stocks, gold, housing.

The Rubicron was crossed when the US confiscated Russian assets. That was the death knell of the USD and the petrodollar system that ruled from 1971 and the USD system implemented at Bretton Woods 1944.

The Reserve Asset, UST, is no longer. Gold is again the Reserve Asset. Central Banks are shifting and have been for some time.

On a positive note: the US is in the process of reshoring its industrial base. This will take time and be inflationary. But in the longer term will be a positive for the US.

AI:



Previously, historically, higher productivity drove a lower Debt/GDP.

Currently, higher productivity (via AI) is driving a HIGHER Debt/GDP.

This is the issue for stocks as inflation hedges: a recession, as shown in another chart, drives stock market bear markets. High unemployment drives even higher deficit spending, higher inflation and a recession or stagflation.

Stocks don't love stagflation.

Markets are priced for perfection. If we get something less than perfection, what will markets price?

jog on
duc

 

[rcw1]

Good morning
Breaking on through $4050 barrier now... wow weeeeeeee....
What a canter. More to come???

Have a very nice weekend, Caulfield Cup and Everest Day pots of gold at the end of them rainbows

Kind regards
rcw1

 

[Captain_Chaza]

Sailing for GOLD -------------------One WEEK at a Time -------------------- in LOG Scale
Please note the Greatest % gain was in The Cinderella year of 2019-20 ie>50%

 

[Captain_Chaza]

Sailing for SILVER by Comparison to GOLD

 

[Sean K]

Sailing for SILVER by Comparison to GOLD
View attachment 186149

That move in May-Aug 2020 looks pretty ballistic.

 

[Captain_Chaza]

Sailing for URANIUM by Comparison to GOLD and SILVER As my father used to say "Pick your Poison"

 

[ducati916]

Full: https://www.kitco.com/news/article/...onal-gold-hub-chief-executive#google_vignette



Full: https://www.reuters.com/world/china...-issues-positioning-hk-global-hub-2024-10-16/



Full: https://www.jpost.com/business-and-innovation/precious-metals/article-824775

Now this transition has been going on for at least 10yrs:



The video has been pulled.

However:



Which is probably part of the reason that JPM has taken the GLD gold out of London back to New York.

The thing with GLD is that it can be settled in cash.

So we have this scenario: the economic cold war escalates further between China (BRICS) and the US + Western allies, which China wins, ie. all commodities are priced in multi currencies and settled net trade balances in gold. US deficits continue to grow due to the compounding nature of debt and the inability to cut any major expenditures.

The US revalues gold. It will happen at the w/e.

Holders of GLD rejoice, as their 'shares' are revalued.
Except that the clause in the contract allows the custodian of GLD to settle in cash at Friday's close.
That massive profit accrues to US govt. via JPM which is now safe and sound in New York.

Gold mines are nationalised or capped profits, ie. taxed at nose bleed levels.

If you don't hold it, you don't own it.

So Bitcoin.

What if the on/off ramps are controlled of made illegal?
What is the true role of Tether?
Energy required to maintain the system: where from at what cost.

If you know the answers to the above and can control those issues, then Bitcoin could be an answer for you.

So this was posted yesterday:



This was also true of the gold market.

It was known as 'Financial Repression.'

What has changed?

The world is no longer unipolar. By that I mean the US military no longer can force countries into holding and recycling trade balances into UST.

Russia have demonstrated that the US cannot fight even 1 major power, never mind 2 (China) and is essentially a broken power. With that military power broken, countries are free to hold as reserves gold. Citizens tend to hold silver, ignoring the fact of the various industrial uses of silver for the moment, just due to the cost of gold.

Physical settlement will break the control over the silver market. Where gold leads, silver will follow.

The power of the USD = the power of the US Military.

jog on
duc

 

[Sean K]

The US revalues gold. It will happen at the w/e.

Is that this weekend, Ducati?

Looks like the Uber drivers are out buying PMs now.

 

[Sean K]

$150K POG? Yikes!!

I only watched the first 2 minutes to get the gist.

Videos

www.kitco.com

 

[Garpal Gumnut]

$150K POG? Yikes!!

I only watched the first 2 minutes to get the gist.

Videos

www.kitco.com

It is always good to dream. You mentioned in an earlier post Sean of considering when to sell your PM accumulations. The following is a suggestion in jest as to how to spend it from a Powerball investor.

$150K is outrageous, really. Once this talk happens it is taxi driver and elevator boy talk time. I said before at $2300 and $2500 a pause was in order. I now hope a pause occurs at $3000. Nothing ever goes up and up forever.



gg

 

[ducati916]

Trying to stand in front of the train selling paper gold and silver and getting run over.

The physical demand is now exposing the leveraged paper suppression that has operated for decades. You have the Communists to thank for this state of affairs. LOL.





Starting to stand in front of USD.



USD strength will create issues in UST market...which simply cannot be allowed to get out of control.

jog on
duc

 

[Captain_Chaza]

Ahoy there Ducati 916

I love your work !
All I ask "Do you think Bitcoin/Trump will ONE DAY Sink GOLD into IRREVALENCE in the Very Near Future?"

 

[ducati916]

Ahoy there Ducati 916

I love your work !
All I ask "Do you think Bitcoin/Trump will ONE DAY Sink GOLD into IRREVALENCE in the Very Near Future?"
View attachment 186368

Morning Cap'n,

Short answer: No.

Longer answer:

No because BTC is (i) at its core a technology based on cryptography, (ii) increasingly tied to stablecoins, which are a source of risk, (iii) has a counter-party and (iv) they are vulnerable to attack

(i) With the advent of quantum computing the pass code that BTC relies on will become insufficient protection.

(ii) Stablecoins guarantee their value through significant holdings of US debt, whose value is being inflated away. Stablecoins also facilitate the ability to transact quickly in BTC.

(iii) The counter-party risk is the energy requirement and digital infrastructure requirement.

(iv) EMP type weapons would damage/destroy some of the infrastructure required to run these coins.

But most importantly, the BRICS nations are stockpiling gold. With the backing of these countries and Central Banks everywhere stockpiling gold, gold is not going to be abandoned. Rather, gold will again increase its influence globally. This trend is well underway.



The impending collapse of the UST as the reserve asset has powered the resurgence of gold as its replacement.

The energy market, of which oil is still of critical importance, has fundamentally forced a repricing of gold. Let me expand on this. In the 1970's the inflation in the US was expressed in the oil market.



Oil went up almost 10X.

With the US needing to inflate away its debt burden today, the resulting inflation needs a release valve. If oil were again to be that release valve and went up 10X to $900/barrel, the global economy would implode in war and mass starvation.

The value of gold is, that as we have heard many times, has no use (other than jewellery) is perfect as a release valve for the coming global inflation (the US is not the only economy with excess debt/GDP) as it safely allows countries to devalue their currencies without unduly fatally damaging their economies.

So even if BTC did not have all of its inherent flaws, it is simply not ready to take on the job of a release valve for global inflation at this time.

jog on
duc

 

[Garpal Gumnut]

Just reading all the different tip sites and financial pages the mob is evenly split on whether Gold will continue its run next week or retreat back to $USD 2600 and then $USD 2500. I guess that means it will continue up beyond $USD 2750 which is a significant number and on the basis of the trend is your friend.

Just on sentiment underlying I cannot see it NOT reaching $USD 3000 before the end of the year. Now that the Meeting of BRICS has finished hopefully it will consolidate around $2750 for a few weeks. I guess eventually it has to fall and consolidate somewhere.

gg

 

[ducati916]

The 'West' is also now starting to buy gold (again) GLD increasing gold holdings.



Take the Ritholtz RIA firm, zero exposure to gold as an example.

With the fundamentals deteriorating at an accelerating pace now (fiscal dominance) gold is the only option. BTC might work for the individual but not nation states.

That's gold, not gold miners:



jog on
duc

 

[rcw1]

Gate ajar for US $2800 ... how good is that ??

 

[Garpal Gumnut]

We haven't had an update on the POG for nearly a week heading in to an election in the USA which whatever way it falls will elect a muppet to rule that country for the next 4 years. Any old way it falls we are looking at volatility in all assets and Gold will be no exception. So what has happened to Gold in the past month leading up to this choice of one fool over another to be POTUS. ?

The BRICS meeting has come and gone and as one would expect the rumour won out over the event with Gold rising a handy $100 prior to the event and then falling back to support at $USD 2750. Volume which had been rising all year has likewise paused. everyone is waiting for the result of the US election which will make no goddam difference to anything really. We will swap a demented Biden for either a nothingburger Harris or a mad Trump. What will change? I'd prefer a maddie as it will provide more volatility for the POG. The Semitic cousins in Israel and Palestine (and now Lebanon, slowly it creeps) continue to bomb the bejaysus out of each other mainly over a belief in the power of land and the after-life. The former makes much sense so the killing will continue. Putin, Xi and the other heavies will continue to inflict as much pain on the world as Biden did and nationalism is rising. Some low IQ fools are talking about tying the $USD to Gold which ain't going to happen just as the low IQ and lazy countries in BRICS will not be tolerated by India, China nor Russia.

My bet is that Gold will rise by $100 or so on bad news and the retrace $40 for the next 12 months which gives a handy $720 rise from here to $USD 3500 or a 20% rise approximately. The Gold Bars hidden in your partner's knicker drawer will still weigh the same.




gg

 

[Sean K]

We haven't had an update on the POG for nearly a week heading in to an election in the USA which whatever way it falls will elect a muppet to rule that country for the next 4 years. Any old way it falls we are looking at volatility in all assets and Gold will be no exception. So what has happened to Gold in the past month leading up to this choice of one fool over another to be POTUS. ?

The BRICS meeting has come and gone and as one would expect the rumour won out over the event with Gold rising a handy $100 prior to the event and then falling back to support at $USD 2750. Volume which had been rising all year has likewise paused. everyone is waiting for the result of the US election which will make no goddam difference to anything really. We will swap a demented Biden for either a nothingburger Harris or a mad Trump. What will change? I'd prefer a maddie as it will provide more volatility for the POG. The Semitic cousins in Israel and Palestine (and now Lebanon, slowly it creeps) continue to bomb the bejaysus out of each other mainly over a belief in the power of land and the after-life. The former makes much sense so the killing will continue. Putin, Xi and the other heavies will continue to inflict as much pain on the world as Biden did and nationalism is rising. Some low IQ fools are talking about tying the $USD to Gold which ain't going to happen just as the low IQ and lazy countries in BRICS will not be tolerated by India, China nor Russia.

My bet is that Gold will rise by $100 or so on bad news and the retrace $40 for the next 12 months which gives a handy $720 rise from here to $USD 3500 or a 20% rise approximately. The Gold Bars hidden in your partner's knicker drawer will still weigh the same.


View attachment 187352

gg

Gold and silver both hitting some support levels.

Gold is right on some week support, but I don't like it.

The next level is where GLD will likely be hitting the 50 dma so perhaps a bounce from there around the black circle.

Silver is back to it's last breakout point around $32.25 ish mark. Hopefully the JPM traders are watching that for a trade, and not the Cup.

 

[ducati916]

The 'Technical' chaps are worried:



jog on
duc