The ONE Reason Why Gold Is Flat

I still believe we will see a significant rally in gold prices at the end of summer. How it all turns out, however, is yet to be seen. [Outsider Club Header] June 22, 2022 By Luke Burgess for the Outsider Club The ONE Reason Why Gold Is Flat What is the deal with gold? That’s not a set-up to a Seinfeld joke. Really, what’s the deal? Inflation is soaring, the equity markets are in a bear market, a recession is looming, geopolitical instability remains elevated, and there are multiple currency wars waging. Markets are fearful, to say the least. The CNN Fear and Greed Index has been sitting in “extreme fear” territory for more than a month. [fert] “Lithium Crunch” Ahead: Buy THIS Stock Our exploding battery demand is causing a giant lithium crisis. According to the International Energy Agency, current lithium production will have to increase by 50x in the coming years... But one little-known company has figured out how to make high-performance batteries that require NO lithium whatsoever. This [patented technology]( was developed in cooperation with the University of Queensland and is starting to roll out as we speak. [Check out my free report on this once-in-a-lifetime opportunity.]( Meanwhile, demand for physical gold is strong. According to the World Gold Council, gold demand saw an annual 34% increase during the first quarter of the year. The WGC said 1Q 2022 demand was “the highest since 4Q 2018 and 19% above the five-year average.” So since there’s extreme market fear and strong demand, gold prices must be soaring, right? Well… Gold — One Year[gold] Gold isn’t soaring at all. It’s stumbling. Despite everything the market has been dealing with over the past 12 months, the price of gold has increased by a measly 2.6%. Gold hasn’t even kept up with inflation. WTF? Well, the “F” is the U.S. dollar. What the FOREX! With everything going on in the market (inflation, equity decline, recession, etc.) investors are moving into gold as a hedge. As noted by the World Gold Council, gold ETFs saw their strongest quarterly inflow in the first quarter of 2022 since 3Q 2020. But more investors are moving into cash as a hedge — specifically the U.S. dollar. Last month Bank of America reported the number of clients moving into cash was at the highest level since 9/11, citing fears of hawkish central banks and the possibility of a recession. And the continued pull back in U.S. equities since then indicates the appetite for cash remains high. Meanwhile, foreign investors have also put high demand on the greenback over the past several months. Values for major world currencies like the euro, Swiss franc, Japanese yen, and others have plummeted over recent months as a result of their loose monetary policies from their respective central banks and other geopolitical factors. As measured by the U.S. Dollar Index, a basket of six major world currencies including those three mentioned, the dollar is nearly at a 20-year high. USD Index — One Year[fergt] Endless Power From a Device Thinner Than a Business Card It can turn every home, skyscraper, and stadium into its own “power plant” — capable of generating its own endless clean electricity 24/7... No storage batteries, generators, or ugly solar panels required. Not even the power grid is needed! This new device is about to create a seismic shift in the global energy industry. [Check out my research on this disruptive little firm.]( Simply put, demand for gold is strong, but the demand for the USD is stronger. As a result, its value in the forex market is soaring. And it’s the USD’s forex value that’s holding down gold prices. Even though gold and the U.S. dollar have officially been decoupled for more than 50 years now, the greenback and the yellow metal tend to trade inversely. Although it’s not extremely uncommon for both to trade in the same direction any more, most of the time when the dollar rises, gold falls — and vice versa. So with the USD Index rallying so much over the past 12 months, we may have actually expected to see gold prices fall. But the yellow metal has mostly remained flat. Compare 12-month charts of the USD Index and gold prices again: USD Index — One Year[fergt] Gold — One Year[gold] I think there’s a lesson to be learned from all of this. And that’s the present gold market is way more uncertain than most investors would expect. The old “rules of thumb” are no longer the rules. High inflation data, market sell offs, recession, geopolitical instability… even strong physical demand… none of these are guarantees of higher gold prices. The only guarantee in the gold market right now seems to be uncertainty. I still believe we will see a [significant rally in gold prices at the end of summer](. How it all turns out, however, is yet to be seen. Until next time, [Luke Burgess Signature] Luke Burgess --------------------------------------------------------------- The Awful Truth About Ethereum... In case you haven’t already noticed, all is not well in the land of cryptocurrency. Take Ethereum, for instance. It has lost almost 80% of its value since its all-time high of over $4,000 back in November 2021. But even worse: Ethereum can’t handle the millions of users it has now. When the technology was small and not well-known, Ethereum ran perfectly fine. Fees were small... transaction times were fast... and energy consumption was limited. But now there’s a MASSIVE traffic jam of users, causing the Ethereum network to grind to a halt. That’s why tens of millions of users are now flocking to a new alternative technology... A groundbreaking engine that performs 5,500 times faster than Ethereum, uses 99.5% less energy, and is only a fraction of the cost. 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