Gold Price - Where is it heading?

[ducati916]

Agree that the big picture looks good but right at this moment GLD is going down, but the question is, how far? Last night GLD has reacted to the 177-179 support zone, closing up for the session but I don't think it's going straight up from here. I'll looking for confirmation of a turn back up.

View attachment 139691

In this next chart I'm doing a measured move type of analysis because I like to do this type of thing and then compare what the market is actually doing which gives another indication of the strength of the market.
View attachment 139693

Not that far. With Mr Putin, from tomorrow, placing a 5000 Ruble per 1gram bid under gold, as the exchange rate adjusts, any attacks on gold will create an arbitrage opportunity to buy gold and sell for rubles.

So historically:



At 60 Rubles:$US gold is valued at +/- $2,600, which would be arbitraged if price was lower. With a 'currency' pegged to gold, we have for the first time in 50yrs+ an ability to calculate an objective price.

jog on
duc

 

[Ann]

Not that far. With Mr Putin, from tomorrow, placing a 5000 Ruble per 1gram bid under gold, as the exchange rate adjusts, any attacks on gold will create an arbitrage opportunity to buy gold and sell for rubles.

Dumb question, but could the Rouble be sanctioned by the West in some way to restrict its use?

 

[Sean K]

We've been saying this for months.

 

[ducati916]

Dumb question, but could the Rouble be sanctioned by the West in some way to restrict its use?

That happened virtually from day one.

The Russian response, is essentially a (now) gold backed currency. The Americans have ceded reserve currency status. The petro-dollar is all but dead. As soon as the Arabs move to a petro-yuan it is dead and with it the American empire.

This new East/West confrontation will look very different to the last one.

America will need to revalue the dollar and peg it to gold very soon (within probably 12 - 18 mths) or suffer potentially a hyper-inflation and currency collapse.

Whatever the propaganda says, the West is losing this one badly atm.

jog on
duc

 

[Garpal Gumnut]

Before everyone gets too far ahead of themselves Russia has not and will not return the Ruble to the Gold Standard.

It has merely on March 4th abolished the VAT on gold purchases which was previously 20% enabling Russians to more easily convert their Rubles in to Gold rather than other currencies.

So this supposed rumoured influence by Russia on the POG by tying the Ruble to the POG is all very well if you are Russian living in Russia.

It will make little difference outside Russia and the POG will continue to trade on Russian/Ukranian and other news, on inventories and production and a host of other matters both real and imaginary.

It will primarily trade on greed and fear.

An example would be a European who has received a demand from Russia to pay for gas on Friday in Rubles. Their contracts are in fixed currencies other than rubles. Petrodollars.

The real game is an attempt by Russia to be paid in rubles and this amateurish hogwash of rumour as to the ruble on the gold standard is just that, hogwash.

Any country who would accede to tying it's imports to a dodgy currency tied in a dodgy way to Gold would be asking to be double crossed at some time in the future.

gg

 

[divs4ever]

Dumb question, but could the Rouble be sanctioned by the West in some way to restrict its use?

yes , but those who might be dealing in Roubles will mostly be on the 'naughty boy' list already ( the 'unfriendly nations ' are already allegedly boycotting most things Russian ) , and i bet Russia will be happy to accept yuan and rupees ( and currencies from other trusted trading partners )

in theory , this is only a device to troll EU and US patsies , giving them an option to pay they will be uncomfortable accepting

( China and Russia already have currency/good swap agreements in place for years , the worst they can do financially is sanction China more heavily , risking India forming very close ties with Russia and China )

it wasn't that long back the world had an 'Iron Curtain ' and a 'Bamboo Curtain ' such things could return

 

[divs4ever]

We've been saying this for months.

well i have been cautiously nibbling away at gold stocks for about a year ( building on positions entered into during the 20113 to 2015 period ) BUT not forgetting iron miners either

 

[ducati916]

Before everyone gets too far ahead of themselves Russia has not and will not return the Ruble to the Gold Standard.

It has merely on March 4th abolished the VAT on gold purchases which was previously 20% enabling Russians to more easily convert their Rubles in to Gold rather than other currencies.

So this supposed rumoured influence by Russia on the POG by tying the Ruble to the POG is all very well if you are Russian living in Russia.

It will make little difference outside Russia and the POG will continue to trade on Russian/Ukranian and other news, on inventories and production and a host of other matters both real and imaginary.

It will primarily trade on greed and fear.

An example would be a European who has received a demand from Russia to pay for gas on Friday in Rubles. Their contracts are in fixed currencies other than rubles. Petrodollars.

The real game is an attempt by Russia to be paid in rubles and this amateurish hogwash of rumour as to the ruble on the gold standard is just that, hogwash.

Any country who would accede to tying it's imports to a dodgy currency tied in a dodgy way to Gold would be asking to be double crossed at some time in the future.

gg

Mr GG,

I disagree. Russia has essentially backed their currency with gold.

Russia sets fixed gold price as it restarts official bullion purchases

www.kitco.com

Look at what happened to the Ruble after the release:



The Ruble caught fire as against DXY.

Why?

Because the Ruble is now essentially backed by gold.

Now depending on where the Ruble trades, it can potentially set up an arbitrage in Ruble/Gold. This potential arbitrage puts a floor under the price of gold.

Even worse:



Mr Putin has the West over a barrel.

The real war is not the hot war, it is the currency war. Russia, China, India and probably most of the world are at war with the petro-dollar, which is now dying on its feet. Once the Arabs re-price oil in Yuan, it is over.

US deficit spending has relied on the petro-dollar since 1971. Without it, US deficit spending will cause a hyper-inflation in the US, killing their currency.

If the US raise the FFR to control inflation, it needs to be 10% +/-. It is what, currently 25bps?



Russia is well aware that the US has overplayed their hand and due to the debt levels, made itself vulnerable, unable to actually raise the FFR even to 2% without crashing the economy.

At 25bps, the Yield Curve inverted on the 2s/10s yesterday, briefly. The 5s/10s inverted last week.



Once the 'West's' sanctions (LOL) start to bite, Europe will starve to death if they don't freeze first. The only thing that they can hope for is an early and warm summer.

jog on
duc

 

[qldfrog]

Mr GG,

I disagree. Russia has essentially backed their currency with gold.

View attachment 139717

Russia sets fixed gold price as it restarts official bullion purchases

www.kitco.com

Look at what happened to the Ruble after the release:

View attachment 139716

The Ruble caught fire as against DXY.

Why?

Because the Ruble is now essentially backed by gold.

Now depending on where the Ruble trades, it can potentially set up an arbitrage in Ruble/Gold. This potential arbitrage puts a floor under the price of gold.

Even worse:

View attachment 139718

Mr Putin has the West over a barrel.

The real war is not the hot war, it is the currency war. Russia, China, India and probably most of the world are at war with the petro-dollar, which is now dying on its feet. Once the Arabs re-price oil in Yuan, it is over.

US deficit spending has relied on the petro-dollar since 1971. Without it, US deficit spending will cause a hyper-inflation in the US, killing their currency.

If the US raise the FFR to control inflation, it needs to be 10% +/-. It is what, currently 25bps?

View attachment 139719

Russia is well aware that the US has overplayed their hand and due to the debt levels, made itself vulnerable, unable to actually raise the FFR even to 2% without crashing the economy.

At 25bps, the Yield Curve inverted on the 2s/10s yesterday, briefly. The 5s/10s inverted last week.

View attachment 139720

Once the 'West's' sanctions (LOL) start to bite, Europe will starve to death if they don't freeze first. The only thing that they can hope for is an early and warm summer.

jog on
duc

This says it all:
https://finance.yahoo.com/news/ruble-edges-closer-clawing-back-154538090.html

 

[Garpal Gumnut]

Mr GG,

I disagree. Russia has essentially backed their currency with gold.

View attachment 139717

Russia sets fixed gold price as it restarts official bullion purchases

www.kitco.com

Look at what happened to the Ruble after the release:

View attachment 139716

The Ruble caught fire as against DXY.

Why?

Because the Ruble is now essentially backed by gold.

Now depending on where the Ruble trades, it can potentially set up an arbitrage in Ruble/Gold. This potential arbitrage puts a floor under the price of gold.

Even worse:

View attachment 139718

Mr Putin has the West over a barrel.

The real war is not the hot war, it is the currency war. Russia, China, India and probably most of the world are at war with the petro-dollar, which is now dying on its feet. Once the Arabs re-price oil in Yuan, it is over.

US deficit spending has relied on the petro-dollar since 1971. Without it, US deficit spending will cause a hyper-inflation in the US, killing their currency.

If the US raise the FFR to control inflation, it needs to be 10% +/-. It is what, currently 25bps?

View attachment 139719

Russia is well aware that the US has overplayed their hand and due to the debt levels, made itself vulnerable, unable to actually raise the FFR even to 2% without crashing the economy.

At 25bps, the Yield Curve inverted on the 2s/10s yesterday, briefly. The 5s/10s inverted last week.

View attachment 139720

Once the 'West's' sanctions (LOL) start to bite, Europe will starve to death if they don't freeze first. The only thing that they can hope for is an early and warm summer.

jog on
duc

I must admit I'm bullish on gold again.

I believe Putin has made a huge miscalculation on top of that he made on Ukraine.

He has underestimated the move from neutral to committed to NATO of many countries in Europe and the inevitability of the spread of his war beyond Ukraine and the mobilisation of the Nordic States, Poland and even Germany against his attempt at hegemony.

Also the aggressive states in Europe have moved to warry and are making adjustments to dealing with energy needs.

He will be only able to sell his gold to vassal states, but my gut tells me he won't, as it will be the last he sells before Euros and Dollars in his reserves.

His Ruble will be worth as much as an Afghan Pul no matter how much he bleats about it being tied to Gold as he will have to keep his reserves to maintain his Ruble.

Gold is held, until it has to be sold.

gg

 

[Ann]

That happened virtually from day one.

The Russian response, is essentially a (now) gold backed currency. The Americans have ceded reserve currency status. The petro-dollar is all but dead. As soon as the Arabs move to a petro-yuan it is dead and with it the American empire.

This new East/West confrontation will look very different to the last one.

America will need to revalue the dollar and peg it to gold very soon (within probably 12 - 18 mths) or suffer potentially a hyper-inflation and currency collapse.

Whatever the propaganda says, the West is losing this one badly atm.

OMG! That just blew my mind, all I can say is thank goodness I am not a fundamental investor attempting to get to grips with all of that and all its implications. Thank you duc, you are truly amazing!

Edit: Ray Dalio has been saying the US is a failing empire for some time.

 

[ducati916]

I must admit I'm bullish on gold again.

I believe Putin has made a huge miscalculation on top of that he made on Ukraine.

He has underestimated the move from neutral to committed to NATO of many countries in Europe and the inevitability of the spread of his war beyond Ukraine and the mobilisation of the Nordic States, Poland and even Germany against his attempt at hegemony.

Also the aggressive states in Europe have moved to warry and are making adjustments to dealing with energy needs.

He will be only able to sell his gold to vassal states, but my gut tells me he won't, as it will be the last he sells before Euros and Dollars in his reserves.

His Ruble will be worth as much as an Afghan Pul no matter how much he bleats about it being tied to Gold as he will have to keep his reserves to maintain his Ruble.

Gold is held, until it has to be sold.

gg

Mr GG,

Correct, Mr Putin will not seek to sell gold. He will seek to accumulate gold via selling gas, oil, etc for Rubles and buying gold with the Rubles. China has also been accumulating gold for decades. They have at best guestimates in excess of 20,000 tonnes.

Mr Putin has a female economist, whose name I forget, however she is head & shoulders smarter than her western counterparts. This (I'm pretty sure) was her plan. This has been planned and coordinated with China for years.

NATO is toothless. In a ground war, they would probably win. But there are 2 major risks: (i) China commits ground troops via Taiwan or mainland Europe or (ii) Mr Putin goes nuclear.

There have been numerous leaks re. US military strength as far as nuclear weapons go. The gist seems to be that the US still operates 1970's nuclear capability. The Russians meanwhile have been upgrading constantly, vis-a-vis hypersonic missiles etc. IF that is true, the outcome may no longer be MAD, but an outright Russian victory.

Which rather explains the milquetoast NATO military response to date.

But as I said before, the hot war is really (for Russia) a proxy war for the currency war, which via commodities, collapses fiat. The tremendous lack of investment, due to low and suppressed prices via COMEX, LBMA, LME, etc, has created shortages everywhere. Those shortages have now created the perfect storm, accelerated by a hot war, to an already hot inflation, due to reckless spending by Western governments to break dollar hegemony via the petro-dollar.

The West, due to the debt levels, $300 Trillion and counting, cannot survive their own sanctions. The sanctions accelerate the inflationary pressures which will collapse all fiat currencies. This is why China, India, Russia have been stockpiling gold for decades. Their governments are de-dollarising and have been planning to do so for a long time. This war has accelerated this process by 10yrs+.

The war is over. Mr Putin has already won.

What we in the west should be concerned with is how do we individually or collectively, avoid being sucked down by our governments' failures?

There are really only 2 options: (i) physical gold/silver or (ii) crypto. I personally wouldn't touch crypto. That leaves physical gold/silver. Playing the miners is speculation, particularly if they are nationalised down the road. Even physical ETF's (PHYS, PSLV) could have their assets frozen/seized/stolen.

*Have you noticed the strength in the Ruble today? On an arbitrage basis, gold is now $2050.

There is a liquidity crisis in the Bond market already from that 25bps raise. LOL. We are probably 1 raise of 25bps from an all out fail in the Bond market which will necessitate another QE programme from the Fed.

Combine that with Russia and we're looking at 15% CPI by the end of the year. A 15% CPI will kill the stock market. Look for a 50% decline +.


jog on
duc

 

[Craton]

Mr GG,
<snip>
Mr Putin has a female economist, whose name I forget, however she is head & shoulders smarter than her western counterparts. This (I'm pretty sure) was her plan. This has been planned and coordinated with China for years.
<snip>
jog on
duc

Female economist you refer to I believe is: Elvira Sakhipzadovna Nabiullina

Held in high regard and head of the Central Bank of Russia. Certainly an interesting figure.

I read that she wanted to resign over the "special military ops" but Putin refused and has nominated a third term for her.

 

[Garpal Gumnut]

Mr GG,

Correct, Mr Putin will not seek to sell gold. He will seek to accumulate gold via selling gas, oil, etc for Rubles and buying gold with the Rubles. China has also been accumulating gold for decades. They have at best guestimates in excess of 20,000 tonnes.

Mr Putin has a female economist, whose name I forget, however she is head & shoulders smarter than her western counterparts. This (I'm pretty sure) was her plan. This has been planned and coordinated with China for years.

NATO is toothless. In a ground war, they would probably win. But there are 2 major risks: (i) China commits ground troops via Taiwan or mainland Europe or (ii) Mr Putin goes nuclear.

There have been numerous leaks re. US military strength as far as nuclear weapons go. The gist seems to be that the US still operates 1970's nuclear capability. The Russians meanwhile have been upgrading constantly, vis-a-vis hypersonic missiles etc. IF that is true, the outcome may no longer be MAD, but an outright Russian victory.

Which rather explains the milquetoast NATO military response to date.

But as I said before, the hot war is really (for Russia) a proxy war for the currency war, which via commodities, collapses fiat. The tremendous lack of investment, due to low and suppressed prices via COMEX, LBMA, LME, etc, has created shortages everywhere. Those shortages have now created the perfect storm, accelerated by a hot war, to an already hot inflation, due to reckless spending by Western governments to break dollar hegemony via the petro-dollar.

The West, due to the debt levels, $300 Trillion and counting, cannot survive their own sanctions. The sanctions accelerate the inflationary pressures which will collapse all fiat currencies. This is why China, India, Russia have been stockpiling gold for decades. Their governments are de-dollarising and have been planning to do so for a long time. This war has accelerated this process by 10yrs+.

The war is over. Mr Putin has already won.

What we in the west should be concerned with is how do we individually or collectively, avoid being sucked down by our governments' failures?

There are really only 2 options: (i) physical gold/silver or (ii) crypto. I personally wouldn't touch crypto. That leaves physical gold/silver. Playing the miners is speculation, particularly if they are nationalised down the road. Even physical ETF's (PHYS, PSLV) could have their assets frozen/seized/stolen.

*Have you noticed the strength in the Ruble today? On an arbitrage basis, gold is now $2050.

There is a liquidity crisis in the Bond market already from that 25bps raise. LOL. We are probably 1 raise of 25bps from an all out fail in the Bond market which will necessitate another QE programme from the Fed.

Combine that with Russia and we're looking at 15% CPI by the end of the year. A 15% CPI will kill the stock market. Look for a 50% decline +.


jog on
duc

Thanks duc,

While seeing much logic in all of your points your conclusions imo are wrong.

To see the War in Ukraine purely through the lens of a larger economic war between the USA and Russia/China is wrong.

The Russians and Chinese do not particularly like each other and the main thing binding them together is a hatred of the economic hegemony of the United States.

Following on Trump's presidency this dislike and mistrust of the USA has spread to Europe though not as fixedly.

This mutual aversion between China and Russia is visceral where they have a border along the Amur River, which has been a point of conflict involving the Mongolian and ethnic populations of that region. The enemy of my enemy is my friend works well.

It is also racial as the Chinese are better business people than the Russians, which causes further angst to Putin.

They will use each other as countries do because it is in their interest.

India is the same, using Putin's cut rate oil since March when it's imports prior were closer to zero than negligible.

War is not worked out on a spreadsheet. This war is about mediaeval issues and economics will trot along before, beside and after it is sorted.

gg

 

[mullokintyre]

duc and GG I congratulate you both, firstly on prosecuting well thought out arguments, and secondly in the manner of the discussion.
No ad hominem attacks, no bagging out the sources, and both respectful.
may there be more of it.
Mick

 

[ducati916]

Thanks duc,

While seeing much logic in all of your points your conclusions imo are wrong.

To see the War in Ukraine purely through the lens of a larger economic war between the USA and Russia/China is wrong.

The Russians and Chinese do not particularly like each other and the main thing binding them together is a hatred of the economic hegemony of the United States.

Following on Trump's presidency this dislike and mistrust of the USA has spread to Europe though not as fixedly.

This mutual aversion between China and Russia is visceral where they have a border along the Amur River, which has been a point of conflict involving the Mongolian and ethnic populations of that region. The enemy of my enemy is my friend works well.

It is also racial as the Chinese are better business people than the Russians, which causes further angst to Putin.

They will use each other as countries do because it is in their interest.

India is the same, using Putin's cut rate oil since March when it's imports prior were closer to zero than negligible.

War is not worked out on a spreadsheet. This war is about mediaeval issues and economics will trot along before, beside and after it is sorted.

gg

Mr GG,

I would agree that self-interest, that old capitalistic saw, is driving Russia and China together to challenge DXY hegemony via amongst many other factors, the petro-dollar.

It has been the presence of DXY hegemony since Bretton Woods in 1944 and the closing of the gold window in Aug. 1971 by Nixon, that has allowed the US to essentially fund US deficits with the rest of the world's savings.

With a debt to GDP ratio now exceeding 120%, the US is unable to prosecute a war with a commodity super-power, particularly when they at the same time antagonise the productive power of China, having off-shored the US industrial base over the last 30yrs.

The 'international community':



So returning to the issue of the hot war:

(i) Nuclear war is a bad option for everyone;
(ii) It is highly unlikely that Russia would seek to expand military ops. into Europe proper and force NATO to act.

Given that the Russians have by and large circumvented 'sanctions', those sanctions were foreseen. The 'nuclear' threat was more to discourage NATO involvement in the Ukraine, which has to date worked. Both supported by China.

So the Ukraine, looks likely to fall to Russia given time, without NATO troops on the ground.

The Ukraine is a tactical move. The strategic move is to destroy DXY hegemony. DXY hegemony, as stated, has allowed the US to deficit spend the savings of the world.

I'm not sure if Sun Tzu ever said it, but he probably did: you attack your enemies where they are weak, not where they are strong.

The US is still the pre-eminent military power, despite their Woke military and other nonsense. Financially, due to their debt, rising inflation and inept Central Bank, they are very, very weak financially. That is their great weakness. That is exactly what Russia & China are attacking and they will win.

Central to that strategy is a gold backed currency. Gold is the key to break the US. When you can no longer 'print paper' to exchange for hard assets, with which to manufacture goods, you have to live within your means. The power shifts from inside bank money to outside commodity money, which is the road Russia is forcing the US down currently. Gold remains money real.



With the loss of DXY hegemony, the US will fade and the East will rise. Of course, eventually they will debase the currency and fade themselves for the next in line to take their place.

Attached is the Congressional Report on Russian nuclear capability.

Some highlights:


The full report is below.

jog on
duc

 

[DaveTrade]

GLD is rejecting support and rejecting resistance at the moment, moving in a sideways range with lower volume. This can be seen more clearly looking at a candlestick chart;


An even clearer view can be seen using a three day chart;

 

[ducati916]

GLD is rejecting support and rejecting resistance at the moment, moving in a sideways range with lower volume. This can be seen more clearly looking at a candlestick chart;
View attachment 139815

An even clearer view can be seen using a three day chart;
View attachment 139816

Attached is the 'arbitrage' floor.

This should not be breached.



I guess we'll find out.

jog on
duc

 

[Ann]

Taking the opportunity to post this long term end of the first quarter chart for gold. It still appears to be travelling in a bearish rising wedge pattern. If it breaks down, I am wondering if it will simply re-test the 1780 level or will it seek lower levels? I haven't all of a sudden become bearish about the POG, I am just keeping an eye on the wedge! As ever, interesting to watch.

 

[DaveTrade]

It still appears to be travelling in a bearish rising wedge pattern.

I'm not sure if that top line of the wedge can be considered valid at this point. I'd like to see another touch of that line.