Hiya
@Manabouttown, interesting times await us given the end of paper gold or gold derivatives which BIS (Bank of International Settlement) has given a members a year to comply with its new gold 1:1 Basel agreement, which market participants seem to be blissfully unaware of the impacts. The past data we have used could imply gold going to $US1960 and pulling back under the paradigm we are used to. That system was propped up IMO by swaps for unallocated gold where paper claims (e.g. COMEX) are multiples of the physical and where the international settlement system lacked transparency when it came to gold holdings and paper swaps.
The reality is gold is becoming scarcer and countries are hoarding it. Remember both Germany and the Netherlands repatriated their gold from the US and perhaps reflects members of the BIS were not in agreement and changes have been made accordingly to protect their interests. China and Russia have succeeded with the inclusion of gold in a system of international settlement with a basket of currencies. Its a new ball game, including crypto gold. It would seem logical that countries who had trade surpluses with the US namely China would be offloading US reserves ($US3 Trillion?) for gold while gold was cheap in $US terms and the value and influence of US dollar continued to decline with quantitive easing and free trade agreements (globalization) where they had a longer view of the role of gold. Floating exchange rates may have allowed the value of a currency to be tied to their market performance in market economies but in some command economies it has been determined by the state or with transactions in kind (Barter). Outsourcing has led to a loss of control over technology on a global scale and reduced market share of former market leaders. The current power shift seems has been spread to those nations who value gold over fiat currencies (backed by promises) which are ultimately backed by the strength of their economies. It would seem market economy monetary policy and Keynesian theory has its limits in a global economy. Fiscal and trade policy will get more teeth. This of course can turn around market performance. The fall of Bitcoin is inevitable as governments start singing the same song for mutual interest to bring about stability.
Given the here and now, indicators such as GDX ETF are more relevant now, because the miners will benefit from change in the way of doing business where bankers will have to become transparent. Tracking the likes of COMEX ETF will become less relevant. Gold in $US terms should spike on based on actual scarcity rather than be manipulated by the paper markets which are on the nose and seem unable to meet allocated contracts falling due next month.
Short term gold has to rise to secure physical to meet unallocated contracts. As I understand it, these contracts were obliged to have gold allocated which it seems were masked by paper swaps in the past which are now in jeopardy. Covid 19 has exacerbated financial stability of countries.
Locally, casino games are likely to continue with junior potentials like TNR perhaps with the desire to get a foothold into future production because they know where gold is going to go; and in the context that Australia remains one of the biggest gold producers in the world. This could explain the sideways movement and downward pressure on companies like TNR with great potential where intentions are easier to disguise by market makers compared to current producers seeing higher lows. Perhaps current producers are creeping up too to secure supply on the hush, hush until the reality hits Joe in the street. It will be a short term phenomenon IMO. Good luck to all that dare to read the plays and can afford to lose.
(20min delay)