Gold Is Not Backing Down
Yesterday I wrote that the Fed had a major problem on its hands…
The fact that gold was ripping higher.
As I mentioned, Americans see gold as a measure of inflation. Food prices, car prices, home prices, stock prices, practically the price of anything can rise and the average American won’t think “inflation.”
It’s a different story with gold.
Once gold starts ripping higher to the point that the average American notices it… then everyone and their mother starts talking about inflation getting out of control.
Yesterday, gold hit a new all-time high of $2,000.
I predicted this would happen back in 2008. It has now happened. And the Fed or someone equally important took notice.
Determined to Soar Higher
Gold got SLAMMED yesterday via a clear intervention.
I say it was an intervention because the drop occurred on no news and featured a dramatic drop in a very short time period. By contrast, real institutions and investors don’t want an asset to move rapidly as it destroys the value.
I’ve illustrated the intervention in the chart below.
It is clear that the Fed or someone else wants gold to go lower. But thus far it hasn’t worked… gold has regained most of its losses.
What’s going on here?
Gold has clearly figured that policymakers will be responding to every issue by printing more money. Just last week, the European Union announced a €750 billion ($858 billion) stimulus program. This comes after the ECB printed €1.25 trillion.
And then there’s the US, where the Fed has printed over $3 trillion, the government has issued a $2 trillion stimulus program, and is now in talks for an additional $1+ trillion stimulus program.
Again, the markets clearly see that policymakers will be responding to every issue by printing more money. And this has ignited a major bull market in precious metals.
Position Yourself for Success in Precious Metals
By the look of things, we’re just getting started here.
And subscribers of my Strategic Impact newsletter are locked and loaded…
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As I write this, we’re seeing several positions showing incredible strength.
And we’re just getting started.
Editor, Money & Crisis