Why gold is diverging from the rest of the commodity markets

Summary

The speaker discusses the gold market's recent surge, attributing it to fear of government rather than inflation. They predict a mild correction in gold prices due to the dollar's potential rally, but consider it a buying opportunity. Gold is seen as a hedge against government actions, unlike Bitcoin, which could be rendered worthless without electricity. The speaker suggests that physical gold and real estate are good investments for protection against future authoritarianism. They also touch on mining stocks, which are more volatile and may see a more significant correction.

Takeaways

• 📉 The speaker believes there will be a correction in the gold market in the coming weeks, but it will be mild.
• 🚀 The current bull market in gold is driven by fear of government rather than inflation, unlike the 2000s when inflation was the main driver.
• 📈 Gold has broken out and is trading sideways, diverging from the general commodity market which is correcting and moving towards a three-year cycle low.
• 💵 The speaker suggests that the dollar is due for an intermediate rally, which could last multiple weeks and put pressure on gold.
• 🏆 Gold is seen as a protection against government, unlike Bitcoin, which could become worthless if the electrical grid is turned off.
• 💰 The speaker advises using any correction in gold as an opportunity to buy more physical gold to protect against future government actions.
• 📉 The speaker anticipates a mild correction in gold, possibly down to $2450 or, in a worst-case scenario, $2300.
• 🏭 Mining stocks have reached resistance and are set for a correction, which might be more severe than the one in gold.
• 💼 The speaker differentiates between mining stocks for trading and physical gold and silver for protection against government.
• ⏳ The speaker warns that authoritarian government is likely to get worse in the future, emphasizing the importance of having assets like gold outside the financial system.

Q & A

Why did the cartel manipulation in the gold market break when gold couldn't go below $2,000?

The speaker suggests that there is a reason behind the failure of the cartel manipulation to push gold prices below $2,000, implying that there is a strong underlying support for gold at that level, possibly due to market forces or investor sentiment.

What caused the recent surge in gold prices?

According to the speaker, the recent surge in gold prices is not driven by inflation but rather by fear of government, indicating a shift in market dynamics compared to previous gold rallies.

Why is gold trading sideways instead of correcting after the surge?

The speaker believes that gold is trading sideways because it is not following the typical market patterns. Instead of a corrective move, gold is consolidating its gains, which could be a sign of strong underlying demand or investor confidence.

What is the potential trigger for a mild correction in gold?

The speaker suggests that a mild correction in gold could be triggered by the dollar reaching a support zone at 100.50 and the subsequent rally in the dollar, which historically has an inverse relationship with gold prices.

How does the speaker view the current state of the dollar and its impact on gold?

The speaker anticipates an intermediate rally in the dollar, which could last for multiple weeks and put pressure on gold. However, they believe that gold will resist this dollar rally to some extent due to its unique market drivers.

What is the speaker's outlook for the dollar in the longer term?

The speaker predicts that after the upcoming multi-week rally, the dollar will break down below its current consolidation, indicating the start of a bear market in the dollar.

Why does the speaker consider gold as a protection against government?

The speaker views gold as a protection against government because it is a tangible asset that retains value regardless of government actions, unlike digital currencies like Bitcoin, which could be rendered worthless in the event of a widespread power outage.

What is the speaker's advice for investors regarding gold during a potential correction?

The speaker advises investors to use any potential correction in gold as an opportunity to buy more physical gold, positioning it as a way to protect against future government actions and to move out of the financial system.

What is the speaker's prediction for the extent of the correction in gold prices?

The speaker predicts that the correction in gold prices will be mild, possibly only reaching $2,450 at most, and doubts it will go as low as $2,300.

How does the speaker differentiate between mining stocks and physical gold?

The speaker differentiates mining stocks and physical gold by suggesting that mining stocks are more volatile and suitable for trading, while physical gold is a better asset for protection against government actions.

What is the speaker's view on the current resistance level for mining stocks?

The speaker notes that mining stocks have reached a resistance level at $40 and are set up for a correction, which could be more severe than the one in gold due to their higher volatility.

Outlines

00:00

📈 Gold Market Analysis and Predictions

The speaker discusses the gold market, noting that most people do not understand the current dynamics. They mention that the cartel's manipulation of gold prices failed when they couldn't push gold below $2000, leading to a surge in prices. The speaker anticipates a mild correction in gold prices in the coming weeks but believes the bull market is driven by fear of government rather than inflation. They contrast gold's performance with the general commodity market, which is correcting and moving towards a three-year cycle low. The speaker suggests that gold's divergence is due to its unique driver and predicts a mild correction, possibly down to $2450 or $2300, viewing it as an opportunity to buy physical gold. They emphasize gold as a protection against government and a hedge against the banking system, suggesting that smart money is moving into gold.

05:02

🏦 Transition from Financial System to Physical Gold

The speaker advises moving out of the financial system and into other assets like real estate, but highlights gold as the most liquid option. They foresee a mild correction in gold prices, possibly testing the breakout at $2450, and recommend using this as an opportunity to convert fiat cash into physical gold. The speaker also touches on the potential for authoritarian government to worsen in the future. Regarding mining stocks, they note that these have reached resistance levels and are likely to experience a more severe correction than gold due to their higher volatility. The speaker suggests that mining stocks are for trading, while physical gold and silver are for protection against government actions. They predict that the mining stock index (GDX) is unlikely to break through its major resistance zone on the first attempt, indicating a buying opportunity after a pullback.

Keywords

💡Cartel manipulation

Cartel manipulation refers to the control or influence over a market by a group of individuals or organizations acting in concert. In the context of the video, it is suggested that there was an attempt to control the gold market, which eventually failed as gold prices surged instead of falling below $2,000. This concept is central to understanding the speaker's view on the forces at play in the gold market.

💡Gold market

The gold market is a global marketplace for the buying and selling of gold, where participants include central banks, investors, and traders. The video discusses the gold market's behavior, suggesting that it is driven by factors beyond typical commodity market influences, such as fear of government actions rather than inflation.

💡Inflation

Inflation is the rate at which the general level of prices for goods and services is rising, and subsequently, the purchasing power of currency is falling. The script contrasts the inflation-driven gold market of the 2000s, where the Federal Reserve's monetary policy and high oil prices contributed to gold's value increase, with the current market dynamics.

💡Fear of government

The speaker posits that the current bull market in gold is driven by fear of government actions rather than inflation. This fear is seen as a reaction to perceived economic instability and potential authoritarian measures, which could lead investors to seek safe-haven assets like gold.

💡Commodities

Commodities are basic goods used in commerce that are interchangeable with other goods of the same type. The video mentions that commodities, in general, are experiencing a correction, moving towards a three-year cycle low, but gold is diverging from this trend due to different market drivers.

💡Dollar support zone

A support zone in currency markets refers to a price level where an asset's price tends to find support as it is falling. In the context of the video, the speaker discusses the US dollar reaching a support zone at 100.50, suggesting that this could lead to a rally in the dollar, which might impact gold prices.

💡Moving average

A moving average is a widely used indicator in technical analysis that helps smooth out price data to show longer-term trends. The video refers to the 200-week moving average as a significant technical level for the US dollar, which could influence its future price action and, by extension, the gold market.

💡Bull market

A bull market is a market characterized by rising prices, typically associated with positive sentiment and investor confidence. The video discusses the bull market in the US dollar, suggesting that it has topped and is now in a sideways trend, with a potential breakdown expected in the future.

💡Physical gold

Physical gold refers to tangible gold in the form of bars, coins, or other forms that can be held and stored. The speaker recommends investing in physical gold as a way to protect against potential government actions and economic instability, positioning it as a more reliable asset than digital alternatives like Bitcoin.

💡Mining stocks

Mining stocks are shares in companies that are involved in the extraction of minerals. The video discusses the performance of mining stocks, which are more volatile than gold itself, and suggests that they are set for a correction. The speaker differentiates between mining stocks for trading and physical gold and silver for protection against government actions.

💡Resistance zone

In technical analysis, a resistance zone is a price level where an asset's price tends to meet selling pressure, preventing it from rising further. The video mentions that mining stocks have reached a resistance zone at $40, suggesting that this could lead to a pullback and a buying opportunity for investors.

Highlights

The gold market is misunderstood by many due to cartel manipulation.

Gold's recent surge is attributed to fear of government rather than inflation.

Gold's price has resisted falling below 2,000, indicating a strong market.

A mild correction in gold is anticipated in the coming weeks.

The bull market in gold is driven by different factors than in the 2000s.

In the 2000s, gold's rise was due to inflation and the housing market collapse.

Gold is diverging from the general commodity market trend.

The dollar's support zone at 10050 may trigger a mild correction in gold.

The dollar is due for an intermediate rally, which could affect gold prices.

The next intermediate cycle for the dollar is expected to break down.

Gold is seen as a protection against government, unlike Bitcoin which relies on the electrical grid.

A potential mild correction in gold could be an opportunity to buy more physical gold.

The correction in gold is expected to be mild, possibly only testing the breakout at 2450.

The worst-case scenario for gold might see it correct back to 2300.

Smart money is moving out of the banking system and into assets like gold.

Real estate is suggested as another asset to protect against government actions.

Mining stocks have reached resistance at $40 and may correct more severely than gold.

Physical gold and silver are recommended for protection against government, not for trading.

GDX, a mining stock index, is unlikely to break through major resistance on the first try.

Transcripts

I think most people don't really

understand what is going on uh in the

gold

market uh they're there is a reason why

the cartel manipulation in Gold broke

right here when they were unable to get

U gold below 2,000 uh there's a reason

why we've got this violent um surge

higher and then instead of getting a

corrective move uh gold just traded

sideways and has has broken out again

now I I think there's uh probably going

to be some kind of Correction in Gold

here over the next several weeks and

I'll go over that more in detail but the

the driver of this move this bull market

in gold is different than the driver

here uh this this driver in the in the

2000s uh was due to inflation and when

the housing market collapsed and the FED

printed um billions and billions of

dollars to try and soften that blow it

um it ignited inflation oil went to 100

almost

$150 a barrel and and gold made um this

huge move from

$250 uh to almost

2,000 um inflation is not what is

driving this breakout in Gold this is

this is um fear of government is driving

this break breakout so now let me show

you Commodities in

general Commodities in general are are

correcting uh they're they're moving

down into probably a threeyear cycle low

although this is a long cycle uh but

gold is uh diverging from that and the

reason is is there's a completely

different driver for gold than there is

in the rest of the commodity markets all

right so um here's here's you know what

is is going to or has the potential to

um trigger a mild correction in gold and

I think it will be mild the dollar has

reached a support Zone here at

10050 you can see we had a temporary um

break below that but it was a false

breakdown but just multiple um tags and

bounces off this I think we're going to

get another one this one also happens to

correspond with the 200 we moving

average and so uh we we're uh the dollar

is due for an intermediate rally that

should last multiple weeks I don't think

it's going to I don't think it's going

to make a higher high uh it'll top uh

before um it gets to this point here and

then the next intermediate cycle we're

going to break down and it's not going

to be a false breakdown like this we're

going to we're going to break down in

Earnest the bull market in the doll

dollar topped back here um it's been

going sideways for a couple of years but

I think um I think that's done done and

I think the dollar will during the next

intermediate cycle will break

down below this consolidation below this

150 and we'll start the bare Market in

Earnest but but we're due for a

multi-week uh rally right here and

that'll probably put some pressure on

gold all right um but I I do think that

the the pullback is going to be mild in

the gold Mark I think it's going to

resist the dollar rally to some extent

um smart money isy trying to get out of

the banking system and into assets to

protect against government and um I

would suggest the main beneficiary of

that is gold

um a lot of people like Bitcoin but you

know if you if you if you turn off the

electrical grid Bitcoin becomes

worthless um gold is protection against

government so that that is why is is

doing what it's doing here and um my

guess is that this this correction could

be very mild at um at most it might well

um

probably I'm going to say that gold will

correct back to

2450 that may be all that it's going to

correct um worst case scenario might

come back down to 2300 but I I kind of

doubt it

um and you know if you understand what

is happening here and why gold is is

diverging from the rest of the commodity

markets then this is your opportunity to

buy uh more physical gold and I'm not

talking about you know the the vast

majority of um clueless traders that are

just trying to make a quick Buck off of

a off the gold rally um the these are

opportunities to protect yourself

against uh what is coming in in

government and get uh get yourself out

of the financial system and into um

other assets real estate would be one um

but I think gold is probably the most

liquid so while we are set up for some

kind of a correction I think it's going

to probably be very mild it may only

come back down to test this breakout at

2450 uh and you should absolutely use

that opportunity to um turn as much

Fiat cash and get out of the financial

system and uh get get yourself into

physical gold to protect for for what is

coming in in the years ahead and um

authoritarian government is just going

to get uh worse in the years ahead

all right and just a quick word on on

mining stocks um they've reached um

resistance at $40 you can see this was a

resistance here it was a resistance here

we had a I think this was a 3-day false

breakout here and and we've we've

reached that resistance here as well so

miners are set up for some kind of a

correction too the correction will

probably be a bit more severe in the

mining stocks they're they're a lot more

volatile than gold um

and you know I've said this before

miners are for trading uh physical gold

and physical silver are for protecting

yourself against uh

government so you don't be surprised if

we if we get a pullback from this

resistance Zone uh you'll it's going to

be a buying opportunity here in the next

several weeks but it it probably will be

a bit more severe in the in the mining

stocks than it then it's going to be in

Gold itself uh and I I think it's

unlikely that GDX will get through this

major resistance Zone on this first try