gold price heading, page-2

Mode...from a TA perspective as you say held $1800 once again...you could call the second test a higher low at a push, but more inclined to say it is still an ascending channel bullish pattern. I don't see gold declining below key level of $1800 and am expecting it to

2 x daily charts in USD basket and XAU below, almost a mirror image of each other. When USD stabilized in August that's when gold cooled off. End of November saw USD decline again and we saw a spike in gold. I really think it's stimulus that is keeping any major buy pressure out of the gold market. I think while the US stock market is still bullish you will see people continue investing in riskier yet higher return markets. (funny that as BTC testing all time highs as I write, waiting for that handle and a breakout)




I don't know if we'll see an immediate rapid decline in USD without inflation. Chart below shows the FED well ahead of other central banks with relation to recent printing, whilst central banks around the world are buying US debt to try to limit the strength of their own currency. Why? Because the US is a huge market and the Biden administration has planned massive economic growth. Central banks know that if their currencies are too strong against the greenback it will limit their exposure to US market. A market that is poised to have 6% economic growth this year which is huge.


So for me I think it will be the combination of a long term weaker USD and demand pull inflation (demand pull because they will try to stimulate economy prior to supply chains being fully operational). I think the market will become overheated really quickly and they will have no choice but to raise interest rates to keep inflation under control (Modern Monetary Policy), and that is when you will see a major correction in the stock market with an increased cost of doing business negatively affecting growth and profit forecasts, hence forcing money flow into hedges such as gold and other commodities. This coupled with stronger retail demand for physical gold (up some 258% for US bullion last year) may cause a sharp spike in price once the tide does turn and people want to hedge against inflation to cover cash positions and stock market risk/poor returns.

The correlation between XAU and interest rates tells the story better than I can...see below weekly gold from 2006-2013 and 10 year interest rates...gold up over 300%, IR's up over 400%.




Pay special attention to the % rate rise in 2007, and where the line is currently...how long do you think they're going to be able to keep this at bay?

When this will happen is anyone's guess, but when it does it will be the mother of all bull markets.

Please don't hold me to this but I'm still firm on the beginning of the end in Q3.

GLTAH...DYOR...G76