Why Gold Is Just Getting Started

The Powers That Be (TPTB) want a war! [Morning Reckoning] April 18, 2024 [WEBSITE]( | [UNSUBSCRIBE]( Why Gold Is Just Getting Started Asti, Northern Italy April 18, 2024 [Sean Ring] SEAN RING Good morning Reader, I hope you’ve been having as much fun as I have watching gold go up, which has been our sole consolation in this mad world. The Powers That Be (TPTB) want a war, and they shall have it, by God! So, the best we mere mortals can do is position ourselves correctly for the inevitable market moves. After all, it’s silly to sit idly by when we can profit from government-induced volatility—of course, that includes upside volatility. Between Jim Rickards, Dan Amoss, Byron King, me, and the rest of our ace Paradigm Press team, we were practically one voice when it came to seeing a big upmove in gold coming. Gold hit its head on the $2,000 ceiling three times (Summer 2020, Winter 2022, Spring 2023) before finally breaking through in late 2023. From there, we had a four-month consolidation where that $2,000 resistance became support. And we’ve been off to the races ever since. After this nearly parabolic rally cools off, we may go into another consolidation pattern. But we could hit $3,000 before the end of the year. As you know, gold is a precious metal used for centuries as currency, jewelry, and investment. Its value is influenced by various factors, like supply and demand, economic conditions, and, especially in this case, geopolitical events (unleashed by incompetent political actors). Many people may be asking themselves, “Is this it? Is the gold move over for now? Will gold fall off a cliff like in late 2011?” Let’s discuss five reasons why the gold price will continue to rise over the next few years. [Claim Your $1 Copy Today]( Rickards Endorses New Book From Top Hedge Fund Titan! [Click here to learn more]( [>> Click Here Now To Claim Your Special $1 Book Offer <<]( [LEARN MORE]( Rampant Inflation Ok, the toothpaste is out of the tube. It’s not Jay Powell’s fault. He relentlessly hiked rates. This is a case of fiscal dominance, which means that Congress is spending like a bunch of drunken sailors. Our national debt is out of control. With the deficits Joke Biden has been running, there’s no telling when things will return to normal. Inflation is one of the most significant factors affecting gold's price. When inflation rises, the value of paper currency decreases, and investors tend to turn to gold as a hedge against inflation. Gold is often seen as a haven during economic uncertainty, and its price tends to rise during periods of high inflation. Since this inflation isn’t going anywhere, count on it to exert upward pressure on gold’s price for years. Growing Central Bank Reserves I know it. You know it. The Fed knows it. Every other damn central bank knows it. Credit: World Gold Council; Sean Ring Since 2009, central bank gold holdings have gone straight up. Central banks around the world hold gold as part of their reserves. According to the World Gold Council, central banks added 673 tons of gold to their reserves in 2021, the most significant increase since 1967. This trend has continued as central banks seek to diversify their reserves and protect themselves against economic uncertainty. The increase in central bank gold reserves will drive up demand for the metal, leading to higher prices. Increasing Emerging Markets Demand Emerging markets, particularly China and India, are significant drivers of gold demand. These countries have a cultural affinity for gold, and it is often used in jewelry, religious ceremonies, and investments. According to the World Gold Council, China and India accounted for 50% of global gold demand in 2021. As these economies continue to grow, demand for gold is expected to increase, leading to higher prices. Heightened Geopolitical Tensions Here we get into the “No shit, Sherlock” stuff. Geopolitical tensions, such as wars, political instability, and trade disputes, significantly impact the price of gold. During times of uncertainty, investors turn to gold as a safe haven, leading to increased demand and higher prices. Joke Biden let his unhinged and unleashed neocons at State start a needless war in Ukraine, which, in all likelihood, will cost America its hegemonic crown. Bibi Netanyahu let the Qataris finance Hamas and had that explode in his face last October. Israel’s IDF isn’t nearly the force the world thought it was. China will never let go of Taiwan. Everyone except the USG gets this. The Global South has had enough of the West. Niger, Burkina Faso, and Mali have thrown out the French. Africom is next. All this makes investors think a new Bretton Woods agreement is likely soon, which is bullish for gold. Market Volatility During economic uncertainty or market volatility, investors tend to turn to gold, increasing its demand and price. If the Treasury’s “fiscal dominance” breaks something in the real estate, money, stock, or bond markets and Chairman Powell can’t clean up the mess, investors will flock to gold. The probability of this happening is higher than any other time I remember. Wrap Up The gold price will continue rising over the next five years due to various factors, including inflation, central bank reserves, demand from emerging markets, geopolitical tensions, and market volatility. While there are always risks and uncertainties in the commodity markets, the long-term outlook for gold remains more than positive. It’s as close to a no-brainer as we’ll likely see in our lifetimes. Investors who want to diversify their portfolios and protect themselves against economic uncertainty must add gold to their investment strategies. All the best, [Sean Ring] Sean Ring Contributing Editor, The Morning Reckoning feedback@dailyreckoning.com X (formerly Twitter): [@seaniechaos]( [“I traveled over 1,000 miles to show you this strange device…”]( [Click here to learn more]( He traveled 1,000 miles away from home… To show you this strange device on a farm in rural Virginia. You won’t know by looking at it, but a secret company behind this strange device could hold the potential to make you rich over the coming years. [Click here to find out how.]( [LEARN MORE]( In Case You Missed It… Hold On! The Gold Branches Are Shaking Greg Guenthner, Editor [Greg Guenthner] GREG GUENTHNER Good Morning Reader, Gold is once again dashing to new all-time highs. Investors are finally starting to notice what we’ve been talking about for months: A new bull run for precious metals is upon us. And if you pay close attention, you have the opportunity to ride the early rallies as gold, silver, and other metals take the market by storm. We’ve closely followed gold’s breakout potential since late last year when the yellow metal finally posted its first monthly close above $2,000 — and subsequently took its sweet time consolidating before extending this breakout move in early March. But most market watchers haven’t paid close attention to precious metals. In fact, up until just a few weeks ago, you would’ve been hard-pressed to find any talking heads mentioning gold on the financial news networks. Too many other distractions clogged the airwaves, from Magnificent Seven stock stories to the amazing parabolic rallies sprinkled throughout the popular semiconductor names. Fast forward to this week and you’ll notice that the semis have gone nowhere since early March — right about the same time a spark was lit under precious metals. Now, we’re seeing the first signs of mainstream investors and analysts buying into the new golden bull. Precious metals are getting their due on the financial news as strong rallies lift gold to gains every week. Silver is also snapping back following months of ugly underperformance. Platinum and palladium are catching bids. Base metals like copper are extending their respective breakout moves. Everywhere we look, we’re finding bullish charts. So it’s no surprise to see the big boys adjusting their year-end price targets. Goldman Sees $2,700 Gold by Year-End Goldman Sachs is the latest firm to grab the tail of the stampeding gold bull. It just lifted its year-end price target on gold to $2,700 after spot prices hit a new record high above $2,370, calling the new gold bull unshakable. “Despite the market pricing progressively fewer Fed cuts, stronger growth trends and record equity markets, gold has rallied 20% over the past two months,” reads the note, via Investing.com. “The traditional fair value of gold would connect the usual catalysts – real rates, growth expectations and the dollar — to flows and the price. None of those traditional factors adequately explain the velocity and scale of the gold price move so far this year.” You might be tempted to dunk on the folks at Goldman for being late to the party when it comes to the precious metals rally. But I think it’s silly to take these “target adjustments” seriously. First of all, these ideas are for the media and the public’s consumption. I do not believe it reflects the firm’s investment strategy. We don’t know what they’re buying or selling at any given moment, but I seriously doubt they’re following these targets as their primary research. Next, it’s important to understand that this is how the game is played. Any analyst target is a moving goalpost. If gold were to crater back below $2,000 (which I don’t think will happen) another updated target would magically appear that fits with the new trend. Now, the main bone I have to pick with the fresh Goldman target is how it claims that this new gold rally is unshakable– because it would not surprise me to see more shakeouts and intraday volatility as new traders and investors pile into metals and miners. We’re already seeing just that… Remember, gold’s decade-long bear market forced just about everyone out of the metals trades until recently. Gold mining stocks, for example, have been dead money for years. No one wanted to own these names when gold was going nowhere. Naturally, these trades are beginning to come back to life as gold futures extend their historic breakout. As the FOMO brews, we’re starting to see some volatile sessions stack up in futures and precious metals stocks. Friday’s trading action is a great standalone example of what we’ll continue to see in the precious metals space as these momentum moves accelerate. Gold futures exploded higher toward $2,450 in the early morning hours, yet peaked around 11 a.m. before proceeding to shed almost $90 into settlement. Gold mining stocks endured a similar reversal, with the VanEck Vectors Gold Miner ETF (GDX) flipping a 3.5% morning gain into a 2% loss by the closing bell. Again, we haven’t seen this type of high-volume chasing in these stocks until recently because no one wanted to be involved in these trades. I still believe we’re in the early innings of a bigger, secular metals rally. But it won’t move higher in a straight line. The branches of these trees will shake — sometimes violently — as more investors pile in. A Solid (Gold) Trading Plan A major component of any sound trading plan involves understanding the current market environment. Over the past several weeks, we’ve discussed how traders can capitalize on shorter-term moves in gold via the futures market, mining stocks, or gold funds as the environment improves throughout the sector. This also means that we have the opportunity to attempt to profit from breakout strategies as individual mining stocks heat up. Knowing your desired time frame is critical when attempting to place your buys and sells as the gold trade heats up. It might seem obvious that longer-term-minded investors will be best served if they patiently buy dips, while shorter-term traders can attempt to ride momentum moves and breakouts. Yet it’s important to remember to have your time frame in mind and execute your plan accordingly. It’s all too easy to tear up your plans and just close your eyes and buy when you see your desired stock or ETF explode higher. Panic buying is real — and can be dangerous! As for price targets, don’t get too caught up in being right or hitting a magical level like gold $2,700 by the end of December. For the record, I tossed out a $2,600 target way back in mid-December 2023. It’s a decent roadmap. But we’ll need to hone in and adjust the route along the way. We’re already witnessing some wild action in precious metals and stocks this week as the tensions between Iran and Israel evolve. Don’t be afraid to take a step back from the charts as additional volatility barges into the markets… Best, [Greg Guenthner] Greg Guenthner Contributing Editor, Morning Reckoning feedback@dailyreckoning.com Thank you for reading The Morning Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:dr@dailyreckoning.com) [Sean Ring] [Sean Ring, CAIA, FRM and CMT]( is a former banker and financial educator and is the editor of the Rude Awakening. Sean has trained interns and graduates from Goldman Sachs, Morgan Stanley, Citi, Bank of America, Standard Chartered Bank, DBS (Singapore), the Abu Dhabi Investment Authority (ADIA), Bank Indonesia (the central bank), HSBC, Barclays, RBS, and BlackRock. He knows the global economy is being corrupted by forces that most people can't understand and has used his unique and worldly experiences to help people navigate the markets. [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2024 Paradigm Press, LLC. 1001 Cathedral Street, Baltimore, MD 21201. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. 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