"Everything you need to know about gold"
GOLD AT $4000?
For that to happen will require something almost unbelievable – if you expect gold to be at $4000 anytime soon, that is. The problem with most predictions for higher gold prices is that they fail to account for the financial and economic turmoil that would accompany those higher prices.
What is so unbelievable that would need to happen for gold to go to $4000 oz.?
PAYMENT FOR SERVICES RENDERED
The gold market has become a social gathering place for an odd combination of participants. Those participants range from the gullible and the disillusioned to those seeking the next big thing.
Permeating the atmosphere surrounding the commotion are false fundamentals and faulty logic. Fundamental analysis, or what passes for it, gets distorted and perverted beyond recognition.
GOLD’S DECEPTIVE NEW HIGHS (audio version)
The latest gold analyses have shifted to a more accommodative nature regarding the yellow metal’s failure to extend its gains after breaking above $2000 for the fourth consecutive year. Here is a chart (source) that depicts what most analysts and investors are seeing…
GOLD BULLS TOO PRICE-DEPENDENT?
Theoretically, a higher price can indicate an increase in value for a good, a service, a stock, etc. That does not mean that a higher price is always indicative of an increase in value.
On occasion, the higher price tells us something else. For example, most people are quite sensitive to the higher prices they pay for groceries and gasoline. Since the forced shutdown of the economy in response to Covid, prices for food and energy have risen along with most other goods and services.
SIGNIFICANCE OF 1980 GOLD PEAK
When President Nixon slammed shut the gold window for foreign holders of U.S. dollars, it was the final step in a planned exit from the gold standard. It was also tacit admission that the United States government, in conjunction with the Federal Reserve, had debased the world’s s reserve currency beyond a point that could no longer be ignored.
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.