Why gold is diverging from the rest of the commodity markets
Summary
TLDRThe 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
- π The speaker believes there will be a correction in the gold market in the coming weeks, but it will be mild.
- π The current bull market in gold is driven by fear of government rather than inflation, unlike the 2000s when inflation was the main driver.
- π 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.
- π΅ The speaker suggests that the dollar is due for an intermediate rally, which could last multiple weeks and put pressure on gold.
- π Gold is seen as a protection against government, unlike Bitcoin, which could become worthless if the electrical grid is turned off.
- π° The speaker advises using any correction in gold as an opportunity to buy more physical gold to protect against future government actions.
- π The speaker anticipates a mild correction in gold, possibly down to $2450 or, in a worst-case scenario, $2300.
- π Mining stocks have reached resistance and are set for a correction, which might be more severe than the one in gold.
- πΌ The speaker differentiates between mining stocks for trading and physical gold and silver for protection against government.
- β³ 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
π 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.
π¦ 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.
Mindmap
Keywords
π‘Cartel manipulation
π‘Gold market
π‘Inflation
π‘Fear of government
π‘Commodities
π‘Dollar support zone
π‘Moving average
π‘Bull market
π‘Physical gold
π‘Mining stocks
π‘Resistance zone
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
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