Gold Price - Where is it heading?

DaveTrade said:

I agree that this move has reached the point where it could start a correction at any time so I'm looking for any indication that one may be coming, but today it still looks strong.

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Sean K said:

There's got to be a proper correction soon.

The consolidation between April and July was healthy, but hardly a correction.

Monthly chart looking pretty parabolic, but non-log.

View attachment 184553
View attachment 184554

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I have to say though that I’ll be watching any correction not with a view to sell.

gg

Has FOMO kicked in or have we passed that? Or, you ain't seen nothin yet?

Sean K said:

Has FOMO kicked in or have we passed that? Or, you ain't seen nothin yet?

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Good morning Sean K
Has FOMO kicked in or have we passed that? rcw: Good point .... who would really know for mine

Or, you ain't seen nothin yet? rcw1: oh yeah 100% bloke

Have a very nice day today.

Kind regards
rcw1

Sean K said:

Has FOMO kicked in or have we passed that? Or, you ain't seen nothin yet?

Click to expand...

All of the above.

gg

@Sean K @rcw1 @qldfrog @divs4ever Hey you monster early birds. US markets much higher o’night on good China news and better Trump polling.

Should be good for Gold.

gg

Garpal Gumnut said:

@Sean K @rcw1 @qldfrog @divs4ever Hey you monster early birds. US markets much higher o’night on good China news and better Trump polling.

Should be good for Gold.

gg

Click to expand...

Good morning Garpal Gumnut

In China, the Shanghai Composite rose more than 4 per cent. Reported, that this was its best one-day performance since July 2020. The CSI 300 index of large stocks listed in either Shanghai or Shenzhen, rose more than 4 per cent, as did Hong Kong’s Hang Seng Index.

China’s central bank has reportedly rolled out some strategies to support the weakening economy. It has been argued that China's stimulus measures lift gold, oil, Chinese stocks and those of European luxury goods makers.

Have a very nice day, today.


Kind regards
rcw1

Written by Jan Nieuwenhuijs, originally publihshed at Money Metals.

Countries that participate in the novel cross-border payments system mBridge are each hoarding gold and are largely responsible for the bull market of the past two years.

How and when the global dollar standard will disintegrate is hard to predict, but setting up a non-dollar payments system (mBridge) and aggressively accumulating gold to replace U.S. Treasuries as the prime international reserve asset is a potent strategy to de-dollarize.

mBridge: An Instant Cross-Border Payment System​

MBridge is an international payments project that was launched in 2021 by the Bank for International Settlements’ (BIS) Innovation Hub in Hong Kong. Currently, there are five full members—Thailand, China, Hong Kong, Saudi Arabia, and the U.A.E.—and over 30 observing members.

The project aims to create a multi-central bank digital currency platform for participating central banks and commercial banks, built on distributed ledger technology (DLT) to enable instant cross-border payments and settlement. MBridge uses an Ethereum-compatible DLT network, the mBridge Ledger, developed by China’s Digital Currency Research Institute. Because China oversees the backbone of the technology, it’s immune to Western sanctions.

A common technical infrastructure has the potential to improve the current system and allow cross-border payments to be more efficient, immediate, and cheaper. On June 5, 2024, mBridge reached the Minimum Viable Product (MVP) stage.

A Surge in Gold Hoarding by mBridge Members​

Readers who are familiar with my writings understand that the gold price is determined by global flows. Based on cross-border trade statistics, it’s clear that the East assumed dominance in the gold market starting in 2022, overtaking the West.

As stated in a previous article, formal gold import and export statistics represent private flows, but they can also reflect central bank activity. Aside from elevated peaks in private demand from China and Thailand, the Chinese and Saudi central banks (PBoC and SAMA) are largely responsible for the rally that commenced in 2022, both having vigorously stepped up gold purchases after the West froze part of Russia’s foreign exchange reserves.

Strikingly, according to available trade data, the countries in the driver’s seat of the gold market are all full members of mBridge: China, Saudi Arabia, Thailand, and Hong Kong (see chart below). Statistics by the U.A.E. lag several years and are misleading due to smuggling to India.

Chart 1. Net gold import data through May 2024 reveals gold stockpiling amid higher prices.
Chart 2. The Treasury Inflation Protected Security (TIPS) yield is the expected real interest rate on U.S. government bonds. Strong gold buying by the East has broken the correlation and rendered TIPS impotent.
Between China, Thailand, Saudi Arabia, and Hong Kong, it’s clear their gold stance has changed since early 2022: they’ve jettisoned their sensitivity to the price. Instead of selling into rallies, they are themselves causing those rallies as a result of strong demand.

Aside from visible global gold flows, we know the official gold reserves of Thailand, the U.A.E., China, and Saudia Arabia are rising in recent years—even when excluding covert purchases by the latter two. Only Hong Kong’s monetary gold has been flat; however, it can be lumped in with Beijing since it’s a special province of China.

Chart 3. The Central Bank of Thailand has increased its reserves to 235 tonnes from 84 tonnes in 2008. In the U.A.E., official gold assets went up from zero to 75 tonnes over this time span. PBoC and SAMA gold reserves are much higher than disclosed.

mBridge Helps Facilitate a Ditching of the Dollar​

The dollar is said to be the world reserve currency, which means it’s the most used currency in global trade. The lion’s share of global international reserves (owned by central banks) are held in dollar-denominated assets such as U.S. government bonds (USTs). Nations wanting to break free from the dollar need an alternative for trade and reserves.

As described above, the members of the mBridge fellowship—all running a current account surplus—have been increasing their gold reserves in recent years. This is referred to as Gold Recycling: storing trade surpluses in gold rather than USTs.

Chart 4. A visualization of the Gold Recycling trend. World official gold reserves are estimated based on reported and unreported purchases by central banks.
Getting rid of the dollar in trade is more challenging. Liquidity in local currencies can be poor; volatility can be risky with limited hedging opportunities, transactions slow and expensive, and payment infrastructures incompatible.

MBridge is about connecting central banks to provide a settlement layer for their digital currencies while supporting interoperability between participants’ existing financial infrastructures. Utilizing mBridge is a stepping stone for more use of local currencies and, eventually, an improvement of liquidity.

Courtesy of BIS Innovation Hub (2022). Saudi Arabia was the last member to join in June 2024.
Cross-border payments often rely on an inefficient network of correspondent banking. Through mBridge, though, its participants seek to do away with correspondent banking and let banks link up efficiently through the new settlement rails. According to the BIS, mBridge payments are faster, safer, cheaper, and more accessible, and settlement is final.

Courtesy of the Hong Kong Digital Currency Academy.

mBridge Facilitates New Non-Dollar Trade Deals​

Energy is the lifeblood of any economy, and Saudi Arabia and China are the largest exporters and importers of oil, respectively. For a long time, the House of Saud preferred to receive dollars in return for oil, based on an agreement with the United States to invest its trade surplusses in USTs*. Despite their long-standing ties with the U.S., the Saudis are becoming eager to trade oil in other currencies.

In November 2023, the PBoC and SAMA signed a currency swap agreement worth ¥50 billion yuan ($7 billion dollars) to “expand the use of local currencies between China and Saudi Arabia and facilitate trade and investment between the two sides.”

This September, the Saudi Minister of Mineral Resources, Bandar Alkhorayef, said in an interview with SCMP that he’s open to new ideas, including the use of renminbi in crude oil settlements. No wonder the Saudis joined mBridge in June.

The PBoC also renewed a currency swap line with with the U.A.E.’s central bank (CBUAE) in November 2023 and, at the same time, solidified a digital currency cooperation agreement as part of ongoing teamwork for mBridge.

As it has reached the MVP stage, mBridge is slowly becoming fully operational. A few weeks ago, as an example, RAKBANK in the U.A.E. executed its first instant cross-border payment—digital dirham against digital yuan—using mBridge.

In May 2024, representatives of the Thai central bank and the PBoC signed a Memorandum of Understanding “on strengthening banking and financial cooperation, including the promotion of local currency usage as well as cross-border payment and settlement,” an apparent reference to mBridge.

The Combination of Gold & mBridge Could Tank the Dollar​

What are the odds that the countries that have taken over the gold market in the past two years are also in a non-dollar trade alliance? Surely, these countries have a thought-out plan to de-dollarize.

Noteworthy, China, Hong Kong, and the U.A.E. have sophisticated precious metals markets where gold is traded in local currency, allowing mBridge associates to convert any surpluses from bilateral trade directly into gold while bypassing the dollar.

Saudi Arabia doesn’t have a developed gold market, but not long ago, a new refinery was opened in Riyadh under the patronage of the Saudi Minister of Mineral Resources, Bandar Alkhorayef. On the refinery’s website, it reads gold bars will “comply with globally approved standards and should be accepted globally by all customers, including all national banks.” That should tell us enough.

One requirement for mBridge to come to fruition is the completion of the digital local currencies, most of which are currently still in a pilot phase. It should be clear, though, that mBridge constituents are being finalized and coming together.

MBridge is likely to become a success because there is a political motive to escape from the clutches of the weaponized dollar if the mBridge group is able to take over the gold market, who knows what they can do on the cross-border payments front?

As we keep track of developments in cross-border payments through local currencies, the rise of gold to the detriment of the dollar in global reserves is inescapable.

Global Gold Reserves Flipping from Dollars into Gold​

My personal calculations suggest gold is currently making up 19% of international reserves, up from 10% in 2014. Meanwhile, the dollar’s share has fallen from 62% in 2001 to 48% in March of this year as a result of the Gold Recycling trend (see charts 4 and 5).

Chart 5. Gold is taking over market share from the dollar in global international reserves.

Since geopolitical tensions aren’t subsiding and the mBridge group has a motive to de-dollarize, we can assume this trend will continue. And we shouldn’t rule out Western investors will join in driving up the price of gold.

The dollar won’t die overnight, yet its slow demise is worth evaluating relentlessly**. I will keep readers posted on the composition of international reserves and developments in the cross-border payments arena.

*A “petrodollar” deal in which the Saudis exclusively accept dollars for oil has never existed between the U.S. and Saudi Arabia.


jog on
duc

Looks impressive:



The 'speculator' category is tiny.



But much more interesting is the following fun fact:


GLD (the biggest gold ETF in the world) existed for 18 years with a single custodian, HSBC.

Then, after 18 years, in Dec-22, JPM decided it wanted to be the 2nd custodian of GLD.

Over the ensuing 21 months, JPM has shifted 72% of GLD-held gold to JPM custodial vaults. Why?

Fort Knox has not been audited since the 1960's.

What if, to manage the debt, the Treasury under Yellen, decided to revalue gold in USD terms?

jog on
duc

ducati916 said:

GLD (the biggest gold ETF in the world) existed for 18 years with a single custodian, HSBC.

Then, after 18 years, in Dec-22, JPM decided it wanted to be the 2nd custodian of GLD.

Over the ensuing 21 months, JPM has shifted 72% of GLD-held gold to JPM custodial vaults. Why?

Fort Knox has not been audited since the 1960's.

What if, to manage the debt, the Treasury under Yellen, decided to revalue gold in USD terms?

jog on
duc

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Anytime I see JPM involved in something I smell a rat.
As long as it benefits JPM, its fine with them.
They would sell their own grandmothers if they thought they could make a buck.

Mick

Gold continues to move towards $AUD 4000.

Presently $AUD 3896.

gg

This chart says so much. People tend to be very glacial in their thinking, they maintain a perception until some time after the dynamic of the situation has changed. We're seeing a completely obvious decline in the USA and USD, but economic perception still holds the USD as a safe haven, despite that having been absurd for quite some years now and the outlook being horrendous. The majority of humans, whether school children or world leaders or investors, behave like sheep, and the herd still perceives the USD being what it makes sense for the world's economy to be based on, and so it still is - even to the point where in some of the local countries in the region I'm in use USD as a preferred currency, whether it's the currency coming out of the ATMs in Cambodia or the immigration officials wanting USD as payment to enter the country at the border in Laos, with them being all but unwilling to accept their own country's currency, and countless other examples in this region, and of course all over the world.

It's clear that the US economy can't maintain its economy/currency to hold on to this dominance for much longer, and we've just seen the proportion of global reserves being in USD falling below 50% for the first time in decades, and it had a clear positive trend from the end of WWII until recently. China would love to take over, but obviously that's not actually going to happen, and gold is the obvious alternative. When this reality is realised by the herd, we could see gold really go for a run.

And ducati mentioned Fort Knox. There was pretty strong evidence that Fort Knox was robbed decades ago and the bars replaced with fakes. Presumably if this is the case, they'd have tightened up the gaps, replaced the gold from other depositories and covered it up by now. I remember many years ago when suspicions of this were being murmured, one of the countries with gold held in a US depository said they'd prefer to take their gold back and care for it themselves, and the US said it would take quite a few years to give it back to them...

If something like this was the case and it came to public light, it would immediately rally the price, as it's possible that reserves are lower than we think. Plenty of fake gold, usually gold-plated bars of other metals, get sold around the world, and it wouldn't be surprised if thorough audits of reserves around the world discovered a lot of the gold bars in depositories were fakes (whether initially purchased as such or stolen and swapped at some point), and absolutely, a lot of privately-held physical gold is fake. The estimates of total gold held are definitely on the high side of the reality.

Sdajii said:

View attachment 184875
This chart says so much. People tend to be very glacial in their thinking, they maintain a perception until some time after the dynamic of the situation has changed. We're seeing a completely obvious decline in the USA and USD, but economic perception still holds the USD as a safe haven, despite that having been absurd for quite some years now and the outlook being horrendous. The majority of humans, whether school children or world leaders or investors, behave like sheep, and the herd still perceives the USD being what it makes sense for the world's economy to be based on, and so it still is - even to the point where in some of the local countries in the region I'm in use USD as a preferred currency, whether it's the currency coming out of the ATMs in Cambodia or the immigration officials wanting USD as payment to enter the country at the border in Laos, with them being all but unwilling to accept their own country's currency, and countless other examples in this region, and of course all over the world.

It's clear that the US economy can't maintain its economy/currency to hold on to this dominance for much longer, and we've just seen the proportion of global reserves being in USD falling below 50% for the first time in decades, and it had a clear positive trend from the end of WWII until recently. China would love to take over, but obviously that's not actually going to happen, and gold is the obvious alternative. When this reality is realised by the herd, we could see gold really go for a run.

And ducati mentioned Fort Knox. There was pretty strong evidence that Fort Knox was robbed decades ago and the bars replaced with fakes. Presumably if this is the case, they'd have tightened up the gaps, replaced the gold from other depositories and covered it up by now. I remember many years ago when suspicions of this were being murmured, one of the countries with gold held in a US depository said they'd prefer to take their gold back and care for it themselves, and the US said it would take quite a few years to give it back to them...

If something like this was the case and it came to public light, it would immediately rally the price, as it's possible that reserves are lower than we think. Plenty of fake gold, usually gold-plated bars of other metals, get sold around the world, and it wouldn't be surprised if thorough audits of reserves around the world discovered a lot of the gold bars in depositories were fakes (whether initially purchased as such or stolen and swapped at some point), and absolutely, a lot of privately-held physical gold is fake. The estimates of total gold held are definitely on the high side of the reality.

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Can't argue with that logic Sdaji, except that the market does stupid irrational things.
I agree that the demise of the USD and America in general has been obvious to anyone who takes even a cursory glance at the level of debt, the total disconnect between the top 15% of the wealthy and the rest of society, the ridiculous hold that celebrities and influencers have over the general populace, the level of mistrust of the main political parties that brings a bombastic charlatan in as a president and then candidate against a POC with the right gender but the intellect of a gnat.
And yet the money is made not in the things of value such as gold, but in things invested in USD.
The only hope is to use those worthless dollars to purchase something that has value, like land, or a utility company, a factory that processes food, and of course precious metals.
When the excrement hits the fan, everyone will be wise after the event and say I told you so.
The smart ones will anticipate it and provision accordingly.
The smartest (or luckiest) ones are those who provision correctly.
The elites of the world pour scorn on the "preppers" who build their shelters, get in a store of provisions, have plenty of guns and ammo, and a place remote enough to be able to defend with a bit of effort.
If it were not for my age, I would probably join them.
Mick

mullokintyre said:

. . that brings a bombastic charlatan in as a president ..

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Sdajii said:

View attachment 184875
This chart says so much. People tend to be very glacial in their thinking, they maintain a perception until some time after the dynamic of the situation has changed. We're seeing a completely obvious decline in the USA and USD, but economic perception still holds the USD as a safe haven, despite that having been absurd for quite some years now and the outlook being horrendous. The majority of humans, whether school children or world leaders or investors, behave like sheep, and the herd still perceives the USD being what it makes sense for the world's economy to be based on, and so it still is - even to the point where in some of the local countries in the region I'm in use USD as a preferred currency, whether it's the currency coming out of the ATMs in Cambodia or the immigration officials wanting USD as payment to enter the country at the border in Laos, with them being all but unwilling to accept their own country's currency, and countless other examples in this region, and of course all over the world.

It's clear that the US economy can't maintain its economy/currency to hold on to this dominance for much longer, and we've just seen the proportion of global reserves being in USD falling below 50% for the first time in decades, and it had a clear positive trend from the end of WWII until recently. China would love to take over, but obviously that's not actually going to happen, and gold is the obvious alternative. When this reality is realised by the herd, we could see gold really go for a run.

And ducati mentioned Fort Knox. There was pretty strong evidence that Fort Knox was robbed decades ago and the bars replaced with fakes. Presumably if this is the case, they'd have tightened up the gaps, replaced the gold from other depositories and covered it up by now. I remember many years ago when suspicions of this were being murmured, one of the countries with gold held in a US depository said they'd prefer to take their gold back and care for it themselves, and the US said it would take quite a few years to give it back to them...

If something like this was the case and it came to public light, it would immediately rally the price, as it's possible that reserves are lower than we think. Plenty of fake gold, usually gold-plated bars of other metals, get sold around the world, and it wouldn't be surprised if thorough audits of reserves around the world discovered a lot of the gold bars in depositories were fakes (whether initially purchased as such or stolen and swapped at some point), and absolutely, a lot of privately-held physical gold is fake. The estimates of total gold held are definitely on the high side of the reality.

Click to expand...

The german government tried to get their gold back..never managed and gave up.
This is factual.
The obvious reason imho is the US does not have anymore the gold the Germans gave them for safe keeping...

@qldfrog did you mean this repatriation which it says was successful in 2015 or did they try to repatriate the remaining 36% and get stymied?​

Bundesbank completes transfer of gold from New York​

14.02.2016 DE FR

Last year, the Deutsche Bundesbank successfully completed the transfer of its gold stocks from New York. "The transfers were carried out without any disruptions or irregularities," said Carl-Ludwig Thiele, Member of the Bundesbank’s Executive Board..

POG $USD 2662
1 AUD = 0.686403 USD
Sep 26, 2024, 07:01 Zulu
Divide in to POG and you've got $AUD POG
Close to $AUD 3878. Down a bit today but not too much and the UK cousins are not finished and the Americano cousins are yet to start.

My thoughts this week on Gold. It occasionally strays.The post, not gold.

• It maintains it's uptrend in all charts from monthly down to daily. Therefore no need to take profits imo if you're a trader. Your call.
• The world is in a state of disorder, violent disorder, which unfortunately for the people affected is good for Gold. The effect on the supply chain worldwide will affect all markets so there is no need to wait for a world war to buy Gold. Any solid kerfuffle e.g Iran v Israel, the European cousins growing a pair and facing up to the Russian cousins, will be sufficient to move the POG.
• The US - China soft war continues, I don't believe it will affect the POG this year. They both need to grow up and China needs to finish the Honesty Module and stop nicking other people's strategic software. The present foolish and not hard enough monetary and fiscal measures undertaken by the Chinese cousins are not sufficient to move markets.
• The US market continues to fret over the possibility of Kamala Harris becoming POTUS. This will not happen but is an opportunity for investors. The POG may fall back to a reasonable buy point for those who feel it is overpriced.
• Should a new or existing investor buy or add to Gold? An individual decision. I will, on a pullback to $USD 2578 but this may change should I see that $USD 3000 is sooner attainable, e.g a rapid rise to $USD 2750.
• For young men and women new to ASF. Gold is a shiny metal, nice to hold and glorious to touch. Women and men seem very attracted to it and not just because of its value. Treat each other nicely and buy Gold in as large an amount as you can afford to make each other happy and reproduce so that I can be well looked after in my old age.

gg

finicky said:

@qldfrog did you mean this repatriation which it says was successful in 2015 or did they try to repatriate the remaining 36% and get stymied?​

Bundesbank completes transfer of gold from New York​

14.02.2016 DE FR

Last year, the Deutsche Bundesbank successfully completed the transfer of its gold stocks from New York. "The transfers were carried out without any disruptions or irregularities," said Carl-Ludwig Thiele, Member of the Bundesbank’s Executive Board..

View attachment 184881

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Let me find back a link

qldfrog said:

Let me find back a link

Click to expand...

@finicky i have to eat my beret: Germany has indeed declared they have received the gold they owned
Mea culpa
Must be a left over of decade old news
Took a while but i understand the logistics are not easy , so.....
I still vaguely remember a country asking repatriation and then giving up...

mullokintyre said:

Can't argue with that logic Sdaji, except that the market does stupid irrational things.
I agree that the demise of the USD and America in general has been obvious to anyone who takes even a cursory glance at the level of debt, the total disconnect between the top 15% of the wealthy and the rest of society, the ridiculous hold that celebrities and influencers have over the general populace, the level of mistrust of the main political parties that brings a bombastic charlatan in as a president and then candidate against a POC with the right gender but the intellect of a gnat.
And yet the money is made not in the things of value such as gold, but in things invested in USD.
The only hope is to use those worthless dollars to purchase something that has value, like land, or a utility company, a factory that processes food, and of course precious metals.
When the excrement hits the fan, everyone will be wise after the event and say I told you so.
The smart ones will anticipate it and provision accordingly.
The smartest (or luckiest) ones are those who provision correctly.
The elites of the world pour scorn on the "preppers" who build their shelters, get in a store of provisions, have plenty of guns and ammo, and a place remote enough to be able to defend with a bit of effort.
If it were not for my age, I would probably join them.
Mick

Click to expand...

As you say, the fact that the USA is currently in collapse is obvious to anyone not suffering from some form of insanity or intellectual deficiency, and absolutely, the market does insane, irrational things, but the market can only be so irrational for so long. We are now in that sweet spot between where the future is obvious and the market has reacted to it. Once the USA has so clearly collapsed that even Blind Freddy and the guy shining your shoes is referring to it as common knowledge, the market will have reacted. We're not far away from that now. This is the time when the market is still able to be irrational.

Indeed, prepping in a remote location isn't the worst plan right now.