I’m rather at variance with most gold pundits. For a start I’m not a Gold bug. To me Gold is just another asset. People get emotionally attached to market assets, you see it with Bitcoin, you see it with silver, you see it with certain stocks and gold is one of the categories of asset that has what can only be called a fan base. That fan base is older than me and there were newsletters about gold before I was born.
But Im no fan though I like Gold as an object as well as having held a lot of it up untill recent times.
I sold my gold at around $5000 an ounce around the same time I sold my silver around $100 an ounce, much to the dismay of my youtube followers. To me the top was in and that was a time to say ‘farewell.’
It seems it was a reasonable call.
But what now for Gold.
Bulls will see this.
I thought this was a strong possibility but no longer.
The second reason I divert from the run of the mill Gold fans, is I do not link Gold and the death of the dollar and all that prepper talk with why Gold moved. It moved in my book because ‘Gold is for war’ but the war is US v China. The impact of such a conflict is hard exaggerate and would be catastrophic.
However the story has changed. The Chinese government seems to have hit a roadblock or perhaps had a sudden rush of sanity about kicking off WW3 by invading Taiwan next year. Maybe its watching Russia and now the US owning themselves by picking on a small but highly prickly opponent to try and bully. Maybe it’s the resistance from the PLA to throwing 2 million men against an impregnable castle able to see them coming weeks early.
Whatever the reason we have a China/Taiwan chinwag on deck and a Gold price stopped in its tracks, all the while the middle east is the biggest mess in decades.
In my mind Gold went vertical because of US, Taiwan and China and that showdown is no longer set for May next year or perhaps even ever now.
It would be a marque move of utter stupidity, but world leaders seem to fancy a gambit these days, however lets hope Im right that this folly is no longer on the cards.
So this is my guess of how Gold will fare.
If the dust settles in the middle east, the next wave to a US industrial buildout and the US will have to inflate like crazy in a wartime economy kind of way to reclaim its industrial hegemony or for that matter be no1 in AI. Anyway you look at it, the US is going to print. This wont mean the death of the dollar but it will mean elevated inflation. That should keep Gold afloat. Failing that or for that matter trouble with China, Gold could find itself back in the $3000s and if you look at the history of this kind of boom, bubble bust cycle that is the most likely outcome.
The tell we be the trend once the geopolitics of US v Iran, settle. That trend will tell all. Im guess sideways but downwards is not of the cards. Anther leg to $8000. It will take very very bad news indeed and I cant now see it.