Well, folks, you can't accuse me of being a perma-bear, when I am now bullish on Precious metals, ironically after having deemed earlier that its time is delayed as the Fed is not expected to pivot soon. There is a Time and Place for Everything.
But what we're witnessing recently is that the market does not care about waiting for the Fed pivot to make a move on Gold. Because this is not a Western led rally. It is led by central bank purchases from China and Poland, large purchases from Singapore (presumably wealthy family offices), but also the Chinese populace to seek safe haven from a depreciating yuan and to speculate in the absence of their traditional speculation of choice-property.
Given the buying stemming from largely China, this could IMO be a move by the Chinese administration to swap their USD reserves for gold bullion, and because they have huge reserves, it would require gradual but incessant accumulation of bullion. That might be enough to result in a gradual climb in the gold price. China could be anticipating a decline in the dollar, or are seeking support from BRICS members to reduce and undermine the relevance of the dollar over time.
Gold bugs are now divided into two camps. The first have been those who believed in Gold from when it was under $2k and now believe that this rally is overstretched, given that the Fed is not cutting rates anytime soon. The second have always believed in Gold and continues to believe it has greater room to run north simply because it has broken to the upside very decisively and has momentum going in its favour.
I have not been a gold bug, although I always supported the idea of holding Gold for the long term, and this thread has said a lot of good things about AUD Gold. Not so for gold stocks, but even they are about to do some catching up. Market participants are not yet sold on Gold/Silver and seemingly still glued to their favourite sector-lithium. A week ago, I said this is IMO misplaced.
In a couple of hours, we will see how precious metals react to the US CPI numbers. I think 70% probability Gold and silver will rally after an initial kneejerk reaction.
Chris Vermeluen believes the current rally can take Gold to $2,600-2,700 and Silver to $36 before a correction, then resumes a strong upward move. Having accumulated, I will sell some then and leave the rest for the long term, and pick more during the correction.
I don't procrastinate. If I decide, I move in, buy high no matter to sell higher later. This 20-30% rise from here could be over within a few months perhaps, so IMO no time for procrastination, waiting for a correction. I don't know when gold stocks will move commensurately but silver stocks track silver much closer, so I go for silver stocks (IVR at 5.5c could IMO double if silver goes parabolic).
