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Despite Today’s Action, the Gold Rally Continues

IF one is like myself, a former message board addict (yes, Bbs), who watched every available tick of gold, silver and any other investment in the olden pre-smartphone days, actions like today’s over 1% decline in prices would trigger a panic and a rush to the coin store to sell one’s excessive physical holdings.

Of course, that was in the old days when us goldbugs would panic due to any move which caused our stocks to decline more than 1% and our physical metal holdings to crash and burn because we felt that the grand central bank conspiracy against us was alive and well.

However, it is now 2024 and time for a reality check.

I. Exhale you Idiots

As I said above, in the old days, we would freak out every time gold had a correction, an off day, was down 75 cents, or word that the central bank cartel was preparing to confiscate gold and make us turn it all in to our governments.

I know, because I heard it on shortwave radio in the 1980’s and 1990’s.

Cool rig, right?

However, that never happened then and will never happen now. Today’s decline in gold prices was to be expected, and if one still believes the moonbat theories of “gold confiscation” I have a 1961 VW Beetle where I stashed gold in the axles and bumpers to sell you. Or not.

II. Normal Profit Taking

The action in the last 3 weeks has been both healthy and predictable. Way, way, way, way back in history, these pages predicted on February 18, 2024, that a close above $2200 per ounce would become an express lane to $2500 per ounce.

Please re-read:

Gold’s Inflation Dilemma

I stated the following:

It is this author’s belief that gold prices will see a decline, potentially below $1900 per ounce as bank liquidity and credit availability further tightens between now and June of this year. The counter to this will be an inflationary wave similar to the July 1980 surge in the CPI-U which ended Volcker’s attempts to reignite an expansion out of the stagflation of the economy for the past half decade.

Apparently, thus far, I am wrong. Gold has surged not because of inflationary pressures but due to geopolitical issues which are pressuring the established global currency status quo.

Thus why in the same article, I also stated:

In the end, gold should eventually rebound overseas as priced in domestic currencies first, especially in Asia. If and when gold in US dollars reaches the first ledge on the mountaintop at $2200 on a closing basis, then and only then will $2500 and the reality of a potential hyperinflationary threat come into focus.

Based on the current state of global instability, especially inside the United States, this crisis could arrive sooner and with more dramatic consequences than yours truly originally predicted.

III. The Chart

From October of last year until now, the bottom near $1900 has not been retested. This is extremely bullish and comparisons to the late 1970’s early 1980 action are now 100% bunk. This is something different, and for those who insure their personal holdings with physical need to remember this fact.

The rules have changed.

Two attempts to stifle the rally over the winter of 2023-24 have failed. Thus when global instability increased in February and the US government displayed a new level of discord, disorganization, and dumbassery, the world said collectively “we better buy more gold.”

Did they use their own local currencies?

Probably not. They probably used the strongest currency on a relative global basis, the US dollar and burned their reserves to increase physical gold holdings, like China, Russia, and numerous Middle Eastern kingdoms have just in case America decides to, uh, er, poop the bed in November.

Considering the two candidates, yeah, the bed is going to get nasty by December.

Gold is a physical insurance against global chaos, not an investment vehicle. Thus if one wants to invest in “gold” or “silver” per se, use the miners, not the ETFs.

Because remember the old adage:

If one can not physically hold it, one does not own it.

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  1. FederalFarmer FederalFarmer 03/13/2024

    The glut of back-dated gold and silver products that flooded the market in December has been completely cleared out now on nearly every major online dealer:

    Retail US physical is finally starting to act like foreign Central Bank demand. Silver premiums shot up on aggregate for a 1oz coin from 14% to 17% overnight this week.

    • 03/13/2024

      100% correct. And the blowback will create new shortages in concert with dollar weakness which will hype up an inflationary surge pushing gold above the next magic number.

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