'Somebody' Finally Cares About Gold

Grant Williams pithily summed up the situation that has been plaguing gold since 2013: Nobody Cares.

Yes, it’s highly likely that the price has been suppressed. But not enough buyers cared to fight the bullion bank/central bank cartel or make life difficult enough for the politicians – and thus, the regulators – to change things.

So gold languished. For years.

But last August, gold quietly entered a bull market after breaking above $1200.

As the price began rising (for both fundamental & technical reasons), we’ve been tracking its progress closely. We do so on a daily basis via Peak Prosperity’s Precious Metals Daily Commentary updates (outstandingly authored by user davefairtex), as key developments happened via our premium reports (like this prediction), and via expert interviews such as our recent in-depth discussions with TFMetals and Incrementum’s Ronni Stoeferle.

As we entered 2019, the increasingly dovish/desperate policy retracements of the central banks – which now appear will NEVER normalize their balance sheets – have boosted the bull run.

Lower real interest rates are gold price-positive. And not only are real rates falling right now, there’s already currently $12 trillion in negative nominal debt trading worldwide right now:

<img class=“aligncenter size-medium” src=“https://peakprosperity.com/wp-content/uploads/2021/09/debt_6-1.jpg” alt="“Negative-yielding debt hits new record (Bloomberg)” width=“800” height=“535” />

And based on this week’s further dovish announcements from both the Fed and the ECB, we can expect more $trillions to be added to that pile soon.

On Tuesday, Mario Draghi apparently went rogue on his fellow policymakers and launched into a swan song version of his all-time hit “Whatever it takes”. The next day, Jerome Powell at the Fed confirmed his willingness to ease and let the market know he stands ready to cut rates multiple times over the next year.

That – plus a downed US drone patrolling the Iran border – poured gasoline on gold, which spiked as high as $1,410/oz, finally breaking free of the $1,350 ceiling that had blocked its advance for years.

Technically, if gold can hold above $1,385, it has a lot of room to run from here. As the chart below shows, gold has traced out a reverse head-and-shoulders pattern and has now punched through the neckline – a bullish breakout – currently trading at $1,400/oz at the time of this writing, the highest price it has traded at since 2013.

[caption id=" align=“aligncenter” width=“620”]<img class=" src=“https://peakprosperity.com/wp-content/uploads/2021/09/GOLD-1.png” alt="“Gold technical chart (Northman Trader)” width=“620” height=“288” /> source: Northman Trader[/caption]

Short of a raid orchestrated by the central planners to fasten tighter the cap on gold (which remains a real possibility given the historical record), the yellow metal shouldn’t encounter much price resistance until above $1,500/oz.

The metal itself and the miners are now in uptrends across all three timelines of the proprietary forecaster maintained by Peak Prosperity’s Precious Metals analyst davefairtex . We haven’t seen such strong indicators in, well…forever.

Here’s gold, which while registering overbought after its recent $100 spike, remains in a very strong uptrend:

[caption id=" align=“aligncenter” width=“674”]<img class=" src=“https://peakprosperity.com/wp-content/uploads/2021/09/1p5fm88daltj2g4ylc6aajtrx2fa7c8u-1.png” alt="“Peak Prosperity Gold forecaster chart” width=“674” height=“517” /> source: Peak Prosperity Gold forecaster 6.20.19[/caption]

And here are the miners (represented by the XAU index), following gold nicely as would be expected, confirming a breakout:

[caption id=" align=“aligncenter” width=“673”]<img class=" src=“https://peakprosperity.com/wp-content/uploads/2021/09/r9pdx36cd4ypwq8sc75j3qrno6d6f6fh-1.png” alt="“Peak Prosperity’s Gold Miner forecaster 6.20.19” width=“673” height=“502” /> source: Peak Prosperity’s Gold Miner forecaster 6.20.19[/caption]

While we may see some price retracement over the immediate term, to be expected after such a monster run-up and as war-with-Iran fears (hopefully) ebb, Dave explains why the current macro situation remains bullish for gold:

The problem is, we have a newly-semi-dovish Fed happening at the same time as renewed interest in a US-China trade deal, a possible impending lockup of China’s banking system (!), the Iranian shoot-down of a US drone (over either Iranian territory – or Iranian waters – or International Airspace, take your pick), while Draghi over in Europe has been accused of lying about the ECB’s renewed dovishness, for which there is apparently no consensus after all. And Draghi is almost out the door himself, so there’s that uncertainty too. Who will replace him? Will they still be as print-happy? Italy may be about to pay its debts using a new currency (the mini-BOT) which may or may not be illegal, and the EU is looking to fine Italy for having a high debt/GDP. This, while Apple has apparently decided to diversify its globalized supply chain outside China. Oh yeah. Boris Johnson appears to be a shoo-in for UK PM.

Enough moving parts?

So what can we expect going forward?

Well if peace breaks out, gold will probably retrace. Silver isn’t quite keeping up with gold, so it will probably retrace also.

This is the problem with safe haven moves. They spike higher, and then they deflate. And that history is why the commercials (I’m guessing here) play the odds and assume the world won’t end this time, and they go short into these big spikes. That, and there is probably some official intervention too.

Ultimately today’s breakout above 1382 is bullish. Even if we do retrace the safe haven move, the 5-year resistance has been broken. Although it appears as though it was the “Iran drone shootdown” snowflake that caused today’s gold buying avalanche, in truth it was probably a whole collection of snowflakes that led to an increase in overall uncertainty. After all, gold has rallied for 4 weeks now. The drone shootdown just pushed prices over the edge – turning it into a spike higher that even 134 “tons” of paper gold was unable to stop.

On the fundamental side, more and more experts and pundits are waking up to what PP has been saying all along: the central banks have painted themselves into a corner they don’t know how to get out of. So they keep using the one tool they have, hoping for a different outcome (and yes, perhaps pushing all of the wealth into the hands of the 0.1% is their desired outcome).

But that strategy is based on perverted logic; it can’t be sustained. You can’t print prosperity. There’s only so far asset prices can rise while real wages remain stagnant. Housing prices can’t long stay above people’s ability to put food on the table, even with <3% mortgages. There’s a point at which more stimulus no longer has any effect.

The smarter minds we talk with agree with us that the unfolding action we’re watching in real time is the total capitulation of the central banks. There’s nothing left after this one except money for Main Street, which we think the banks will hold in store to have something left for the arriving global recession (to be cutting rates at this point is absolutely insane).

So it’s quite likely a nasty deflationary downdraft lies in our future. While this may initially cause gold to drop in price, the metal should fare much better than the pantheon of risk-assets falling from their current all-time bubble highs. As we often say in our live presentations: “In a bear market, expect to lose money. The trick is to lose a lot less than everybody else”.

But even if the central banks succeed in preventing such a deflationary rout, then it will soon become confetti time for the word’s fiat currencies.

Do you realize that if you have a cool $1mil of cash on hand, you make only $20k/year if you have it in T-bills, or (much) less than that if kept in your bank account? Less than 5% of Americans have that kind of scratch on hand, and yet it produces an income below the US poverty level. If we stay on the trajectory we’re on, that $1 million won’t be worth diddly soon.

But gold? Gold should truly shine in this situation: both by maintaining its purchasing power and increasing in value as $trillions in capital look for safe haven.

Remember that the $7 trillion gold market is a small doorway compared to the $164 trillion held in stocks and bonds. (And the <$1 trillion silver market is ridiculously tiny relatively). If (more likely, “when”) just a few $trillion flee risk assets into the precious metals, the prices of gold and silver will explode.

Of course, our long-standing advice remains the same: Position yourself for this predictable outcome in advance.

Especially since the long awaited breakout above $1,350 has finally taken place. That technical milestone, combined with the last-gasp desperation the Fed and ECB have shown this week, indicate that the really big moves for the precious metals are now cleared to happen. Things could move quite quickly from here.

Specifically, we recommend availing yourself of the following three free resources if you haven’t yet already:

  • Get educated on how/where to buy & store gold and silver. Read our free primer here.
  • For the rest of your portfolio, talk with an advisor who understands the risks warned of here. If your current professional doesn't fit the bill, schedule a free consultation & portfolio crash-audit with our endorsed advisor.
  • Follow the daily action in the precious metals by reading our excellent Precious Metals Commentary (referenced several times in the article above). You can do so here.
Finally, gold is no longer being ignored.

‘Somebody’ Cares. Which is why we’re now at the highest levels seen in over half a decade.

Just imagine what the price will be like when Everybody Cares…

This is a companion discussion topic for the original entry at https://peakprosperity.com/somebody-finally-cares-about-gold/

it feels to me gold going up is about a loss of confidence

My wake up call came in 2008 while I was driving across a bridge and heard the gold price mentioned on the radio…$900 seemed really high. For most of my life it seemed gold was around $360 an oz. The next few days I travelled down a rabbit hole as I read about exponential money creation, gold confiscation, and Nixon taking us off the gold standard. The fact that many central banks have been buying since then tells me something. Something more than Ben Bernanke’s quip to Ron Paul’s question concerning Central Banks holding gold…tradition. That was one of the funniest things I’d ever heard. Gold is not a panacea for the ills illustrated in the Crash Course, but it’s a whole lot better than fiat currency.

Cramer: 'The real world is much worse than the stock market indicates''

I’m wondering if 100% gold backed crypto tokens like DGX are a possibility. Tom Cloud of SRSROCCO seems to like the possibilities.

has sucked for those of us that have trusted gold more than the ““markets””.
Perhaps the price will start reflecting reality as we see it. Perhaps not.
It doesn’t matter, since once you’ve peeked behind the curtain, you can’t un-see it.
So we’ll keep trusting ourselves, put our money where our mouths are, and see how it plays out.
Heck, I may even look at the charts again if this continues.

…Useful in planning/acting now and continuing to frame expectations for the future.

I’ve seen some comments about whether this is a genuine rise or whether it’s another head fake like a few years ago when they knocked it down from 1900. This appears similar as it isn’t a violent default resulting in instant massive repricing. It’s a relatively slow and steady increase over days, as if they are building their short positions ready to pounce. Very similar to several years ago.
I wonder. But back in 2013 or whenever it was, they had clear motivation to do this. It destroyed confidence in the metals and kept it out of the news for years, after the waterfall take down passed. Now, I’m not so sure it is the same situation. Central banks are buying at historic highs now. Central banks dont buy gold based on public opinion or the media. So they dont have “sentimemt” to manage. They know something so they’re buying. Sentiment in western etail investors is dead so there’s nothing left to kill there. And if they kill the price again all that does is cause Asians to buy more physical which is the opposite of what the fed wants. Based on average central bank purchases of 500 t per year, there shouldn’t be much of fort Knox’s purported 8000 tons left so maybe this is the runup to the end.
So I see no reason now for another take down other than this being the final setup for a waterfall price crash before the end so that when the system does reset, gold price wont be high. And to make one final mountain of fiat cash from it.

In the original article above, I noted how gold had spent the past year tracing out a reverse head-and-shoulders trading pattern and had just broken above the neckline.
When such a breakout occurs, the price action can move quickly from there. Looking at the next resistance level (in the $1,500s), I wrote:

Technically, if gold can hold above $1,385, it has a lot of room to run from here.
Well, gold managed to close above $1,400 on Friday. That indeed has led to a continuation of the breakout run, with the metal rising above $1,440 a few hours ago in the aftermarket: Look at that chart. That's a $100/oz jump in gold (+7%) over just 5 trading days. That's how fast things can move when a breakout occurs. Now, a pull-back of sorts will almost undoubtedly happen soon. That's expected and healthy when price moves this far this fast. What we'll hope to see is continued climbing, probably at a slower pace, once the pull-back occurs. As mentioned previously, we expect the next major resistance level for gold to happen once it gets in the $1,500-1,520 range. Of course, if this run is purely based on Iran war fears (I don't think it is), gold could return below $1,400 in short order. Same if the commercials have allowed this breakout simply to set up an epic slam event. But increasingly I don't think that's the case. This looks/smells more like the gold price finally beginning to get out from under the forces keeping it range bound over the past 7 years. As we wait for confirmation of that, I'll continue to read Davefairtex's excellent daily Precious Metals Commentary to track the situation. You should, too.

Merrill Lynch Caught Criminally Manipulating Precious Metals Market “Thousands Of Times” Over 6 Years (ZeroHedge)
"Remember when it was pure tinfoil-hat conspiracy theory to accuse one or more banks of aggressively, compulsively and systematically manipulating the precious metals - i.e., gold and silver - market? We do, after all we made the claim over and over, while demonstrating clearly just how said manipulation was taking place, often in real time.
Well, it’s always good to be proven correct, even if it is years after the fact.
On Tuesday after the close, the CFTC announced that Merrill Lynch Commodities (MLCI), a global commodities trading business, agreed to pay $25 million to resolve the government’s investigation into a multi-year scheme by MLCI precious metals traders to mislead the market for precious metals futures contracts traded on the COMEX (Commodity Exchange Inc.). The announcement was made by Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office. In other words, if the Merrill Lynch Commodities group was an individual, he would have gotten ye olde perp walk.
As MLCI itself admitted, beginning in 2008 and continuing through 2014, precious metals traders employed by MLCI schemed to deceive other market participants by injecting materially false and misleading information into the precious metals futures market.

They did so in the now traditional market manipulation way - by placing fraudulent orders for precious metals futures contracts that, at the time the traders placed the orders, they intended to cancel before execution. In doing so, the traders intended to “spoof” or manipulate the market by creating the false impression of increased supply or demand and, in turn, to fraudulently induce other market participants to buy and to sell futures contracts at quantities, prices and times that they otherwise likely would not have done so. Over the relevant period, the traders placed thousands of fraudulent orders.""

Wow, $25 mil fine for 7 years of skulduggery. Thats realy got to hurt an outfit like MLCI. They probably won’t do that again…Aloha, Steve.

It would be nice if individuals were actually punished for breaking the law one of these days. It’s as if a murderer’s company was fined for him killing someone, but he gets to walk free.
In my America, people - individuals, not companies - would be prosecuted for crimes they committed. No fines. Jail time. This sort of thing would stop instantly.
Case by case, “our prosecutors” continue to incrementally destroy confidence in markets, government, and the rule of law. Someday after enough of these acts, there will be a reckoning, when that last snowflake causes the avalanche.

So corporations are persons for purposes of political campaign contributions but they’re faceless non-persons for criminal acts?! ?‍♂️??
We deserve all the “reckoning” that is coming to us.

As bad, awful and stench-o-rific as the non-prosecution of Merrill Lynch over the gold bid rigging is, the government’s handling of the Jeffery Epstein case is just as bad and maybe even worse.
It’s 99.999% clear that he was and continues to be protected because other powerful people were involved with him in ritualistically, sexually abusing minor girls.
The Miami Herald has done a fantastic job of exposing this and keeping the heat on. Kudos to that MSM outlet on this topic!
The non-prosecution of Epstein, et al., stinks to high heaven and the mystery is there are still people in the Justice Department willing to go to bat to keep a lid on this.
We know that both Trump and Bill Clinton took many trips on the “Lolita Express” the private plane that Epstein used to transport children and powerful men to and fro, 26 separate times for Bill Clinton including 5 without his Secret Service detail.

Jeffrey Epstein plea deal must stand, prosecutors tell sex abuse victims June 25, 2019 Suspected sex trafficker Jeffrey Epstein was handed another break by the Department of Justice on Monday when federal prosecutors rejected his victims’ efforts to throw out his plea deal and prosecute him for abusing dozens of underage girls. In the 35-page motion, filed in federal court in the Northern District of Georgia, federal prosecutors said that there is no legal basis to invalidate Epstein’s non-prosecution agreement — and they warned the federal judge in the case against doing the same. U.S. Attorney Byung “B.J.” Pak said that because Congress did not outline specific penalties in the Crime Victims’ Rights Act when it was created by Congress, Epstein’s victims have no right to demand anything from the government — not even an apology. A federal judge ruled earlier this year that the plea deal violated that legislation. In the filing, federal prosecutors did concede that the U.S. Attorney’s Office in South Florida failed to treat Epstein’s victims — most of whom were 13 to 16 years old — fairly, but they said that the law gives prosecutors discretion in deciding how to dispose of a case. Victims have a right to confer with prosecutors, but no rights beyond that, Pak said. The federal judge in the case, Kenneth Marra, will have to decide what happens now. Epstein, a politically connected financier, escaped federal sex-trafficking charges after his high-powered lawyers, led by Kenneth Starr and Alan Dershowitz, pressured prosecutors in Miami to work out a secret plea deal in 2007. The controversial agreement, engineered by then-Miami U.S. Attorney Alexander Acosta, allowed Epstein to plead guilty to lesser charges in state court, resulting in a 13-month jail sentence on a single prostitution charge involving a girl who was 17. At the time, investigators had identified nearly three dozen victims. The women, now in their late 20s and early 30s, were underprivileged middle and high school girls recruited in and around Palm Beach County from about 1998 to 2006. The Miami Herald, in a three-part series published in November called “Perversion of Justice,” detailed through emails, letters and other court documents how federal prosecutors worked hand-in-hand with Epstein and his lawyers to keep his victims in the dark and seal records so that no one would know the extent of Epstein’s crimes or who was involved.
Hard to maintain any illusion of justice in this case. Hard to persist in the idea that the Justice department is filled with earnest, hard-working, people who care about the country and laws. I bolded the part about Dershowitz working diligently to get his client off because he may not have been the most impartial of lawyers.
Flight Logs Put Clinton, Dershowitz on Pedophile Billionaire’s Sex Jet Jan 2015 Bill Clinton took repeated trips on the " Lolita Express"—the private passenger jet owned by billionaire pedophile Jeffrey Epstein—with an actress in softcore porn movies whose name appears in Epstein's address book under an entry for "massages," according to flight logbooks obtained by Gawker and published today for the first time. The logs also show that Clinton shared more than a dozen flights with a woman who federal prosecutors believe procured underage girls to sexually service Epstein and his friends and acted as a "potential co-conspirator" in his crimes. Epstein's predatory past, and his now-inconvenient relationships with a Who's Who of the Davos set, hit the front pages again earlier this month when one of his victims, Virginia Roberts, claimed in a federal court filing that Epstein recruited her as a "sex slave" at the age of 15 and "sexually trafficked [her] to politically-connected and financially-powerful people," including Prince Andrew and attorney Alan Dershowitz. (The latter, the filing claimed, had sex with the victim "on private planes"; Dershowitz vigorously denies the charges, as does Prince Andrew.) Other prominent figures whose names appear in the logs, which document globe-spanning flights on Epstein's planes during various periods from 1997 to 2005, include Dershowitz, former Treasury Secretary and Harvard president Larry Summers, Naomi Campbell, and scientist Stephen Pinker. The logs also cast doubt on public statements made by Dershowitz, who has been vigorously downplaying his relationship with Epstein since Roberts levied her accusations against him. Dershowitz has attempted to paint himself as a mere passing acquaintance of Epstein, suggesting to the American Lawyer last week that he only began hanging around the billionaire to fundraise for his school, Harvard.
It just goes to show, if you are going to commit serious crimes in the US, be sure to include a lot of very powerful people, that way you’ll never get charged at all, or get a sweetheart deal if you do. In the meantime, ordinary people who observe this can be forgiven if they lose just a little of bit of faith in their government and various institutions. The corruption of Rome is proceeding apace. The appearance of the impartiality of law is as important as the reality of impartiality. Those who erode either should face serious consequences. Unless things are too far gone. Then carry on, because it’s probably best to get to the bottom of the barrel as quickly as possible.

Happens to be under a criminal probe by the Justice Dept.involving precious metal trades…