Various promotions throughout the continuity of the ascent have led down to handy buzzphrases such as “Did you get the gold?” Like a carton of milk. Other promotions have presented gold as an asset to go through all sorts of macro phases, from “paper money will explode any day” to “inflation will kill your future” to “deflationary Armageddon is on its way”.
However, throughout the upswing, policymakers have covered it up and amplified the chaos in every crisis as long as continuity allowed.
By “allowed” I mean the system inflated on license given to them by the decades-long deflationary market signal and the sharp deflations against which it inflated. The most recent downturn was the most severe in the first quarter of 2020.
But in April of 2022, something officially happened. It was during the month – a year ago – that the market players who were controlling the ball realized that everything had changed on a macro level. The rules have changed over the past four decades due to the changing trend of the US 30-year dividend continuity. This was the backbone of the anti-inflationary policy makers were allowed to inflate almost chronically at will during various crises. But this dance is over.
The task now is to correctly determine what awaits us in the future in this new world imbued with total uncertainty. If for no other reason than this uncertainty, gold is an asset that can be “turned on” because it is the holding anchor of value within a changing system that may collapse. Gold doesn’t go anywhere, which means it doesn’t go down either even when its price goes down.
With the old system disintegrating, gold is not going anywhere, even as its price increases. Remember that things related to gold, and cyclical speculation from stocks to commodities to cryptocurrencies, rise and fall, which affects the prospects for gold, and therefore, the price assigned to it at any time.
There is speculation associated with gold, the gold mining sector. Gold stocks benefit from an upside outlook when gold is seen to appreciate against cyclical assets. However, these upswings were fleeting because there was always a new bailout in the offing, as evidenced by the continuity description above. But if something happens and the post-bubble environment becomes real, can we not say that something could be different this time around? Yes it can. Gold mining stock speculation can work very well, and Rabbit Hole (NFTRH) manages to do that on a weekly basis.
But today we are also witnessing a false dawn (bear market rally) to renew the sentiment of the bulls leaving the stock market, and gold and gold stocks are among the leaders of this rally. But when this rally and false dawn ends, gold and gold stocks may be corrected, we will be on the lookout for the next phase of gold decline which is likely to be more permanent under the new macro economy.
In the short term, gold is dealing with the “round number” resistance at 2000. It seems only a matter of time.
In the long term, the huge gold cup and choppy handle indicate higher prices in the future. If the chart’s measurement is correct (it’s a TA, speculation, not a guarantee), gold will target 3000+. That possibility has been loaded since gold hit its all-time high to form the trophy’s right-hand rim in 2020.
Conclusion
Gold is not a price vehicle, so it should not be encouraged or pumped with stupid buzzwords like “Did you get gold?” . And it will arrive at its destination with its value proposition. It is rock and anchor. With the system divided, the value of said rock (AKA insurance) seems to have been hardcoded into the minds of humans in the modern financial age.
