An Ode to Ore - The People's Money is Returning to Its ThroneLike many market observers, I am expecting a full-blown disaster to come whirling through our economy in the not-so-distant future. It will not be a simple stock market correction - or even a stock market crash. It will be worse than your run-of-the-mill mortgage crisis and is more severe than any sort of typical credit crisis. No, this time it will be a legitimate currency crisis.
The last currency crisis was seen during the Weimar Republic in 1919, and the only notable one before that occurred in France, via John Law's Mississippi Company. Having spent the last two weeks trying to understand all the elements that lead to a currency crisis, I have learned only one important takeaway - own physical gold before it happens. While society degenerates for everyone under such circumstances, having some gold (real money) before the insane "appreciation" begins will make things a bit better for those lucky few.
So, since this post is more about gold's recent and future price action, and less about a 10-year currency ruination by our beloved Fed, I will discuss the important parts of the chart above:
1) Accumulation is at all-time highs. This is extremely useful to know because it means that this recent surge is NOT a pump and dump. Unlike all the past gold rushes over the last 40 years, this one actually involves holding the physical asset, rather than paper trading ethereal futures and forwards contracts. Moreover, it means that you can buy and hold gold now without the fear of losing half of it in a month's time.
2) While physical gold is the way to go, you can also trade it on the side. Thus, it is good to know what our current price channel looks like. The bolded royal blue lines denote the start of the current trend, which, unsurprisingly, began right when the Fed declared that it will be printing trillions of USD. The word "Trillions" is so ridiculously large that even non-market participants are thinking "inflation is coming." Use this trend for the next two months unless an even more parabolic trend emerges.
3) For those that want to trade contracts over the next two weeks, see the green price trajectory. This is very likely the general path it follows - just look to any Wave II correction in the past five years for evidence.
I will probably make other gold posts (silver too) as the price action materializes into a parabola - but this should be a good starting point for those curious about the recent moves in gold (and other metals). Even if there is a crisis, it's all relative to gold in the end.
- Golden Pig
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