Here’s Why You Should Buy Gold Now
Gary Tanashian | Mar 31, 2023 10:25
Various promotions along the way of the Continuum have distilled the case for gold down to handy buzz phrases like “got gold?” as if it were a carton of milk. Other promotions have presented gold as the go-to asset through all types of macro phases, from “fiat is gonna blow up any day now” to “inflation is gonna eat your future” to “a deflationary Armageddon is on the way.”
Yet all along the Continuum, policymakers papered it over and inflated the mess at every crisis as long as the Continuum allowed.
By “allowed,” I mean inflated the system per the license they were given by the deflationary market signaling that lasted decades and the acute deflationary episodes against which they inflated. The last was the most intense, in Q1, 2020.
But in April of 2022, something officially broke. That was the month – 1 year ago – that market players who were on the ball would have realized that everything changed on the macro. The rules of the previous four decades changed because the trend of the United States 30-Year Treasury bond yield Continuum changed. Period. This had been the disinflationary backbone against which policymakers were allowed to chronically inflate almost at will during various crises. But that jig is up.
Now the job is to correctly define what is ahead in this brave new world of macro uncertainty. If for no other reason than this uncertainty, gold is a “go-to” asset because it is an anchor to a value within a changing system that may well be falling apart. gold goes nowhere, which means it also does not go down even when its price does.
As the old system comes apart, gold will also go nowhere, even if/as its price goes up. Remember, the stuff around gold, cyclical speculations from stocks to commodities to crypto-currencies, goes up and down, affecting the mass perception of gold and hence, the price assigned to it at any given time.
There is speculation associated with gold, which is the gold mining sector. gold stocks leverage that perception to the upside when gold’s value is perceived higher vs. cyclical assets. However, these rallies have been fleeting because there was always a new policy bailout in the offing, as implied by the Continuum above. But if something broke and a real post-bubble environment is engaging, might we not say something could be different this time? Yes, we could. The gold mining spec could work very well, and NFTRH manages that weekly.
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But today, we are also managing a false dawn (bear market rally) to renew the spirits of the dear departed stock market bulls, and gold and gold miners are among the leaders. But when this false dawn rally ends, and perhaps gold and gold stocks get corrected, we’ll be on the watch for the next and likely more enduring phase of gold out-performance on the new macro.
In the short-term, gold is dealing with its “round number” resistance at 2000. It appears only a matter of time.
In the long-term, gold’s massive Cup and volatile Handle imply higher prices to come. If the chart’s measurement holds true (it’s TA, folks, not a guarantee), gold would target 3000+. We have had this prospect loaded since gold made its higher high to form the Cup’s right side rim in 2020.
gold is not a price vehicle, so it should not be cheered, rooted for, or otherwise pumped with stupid buzz sayings like “got gold?”. It will get where it is going with its own value proposition. It is a rock and an anchor. As the system splits, the value of said rock (AKA insurance) seems to be marked up in the minds of newly financially sober humans.
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