I have come to view Gold as one of the most manipulated markets in the world. It’s probably only second in that regard to Silver and long term watchers of both these markets would be familiar with the now common “Smackdown” phenomena that seems to knock these precious metals down to earth every time they look like they might start to challenge the dominance of Fiat Money in our modern world. Sometimes, however, they are able to break free and properly reprice themselves so, just like Crypto, there can be big moves in short spans of time which are then followed by a whole lot of nothing for long periods of time as they are once again bottled up. For this reason, many Crypto junkies find the Precious Metals markets boring. But not me...
To me Gold and Silver (like Crypto) are “Anti-Fiat” currencies. The big difference between Precious Metals and Crypto is the fact that Precious Metals have long established markets (over many centuries) so all the legacy players are well and truly entrenched and they have been using paper markets and derivatives to keep the markets in check. It can be frustrating to HODL Precious Metals through those big Smackdowns, but every now and then there are good opportunities and you still can’t beat Precious Metals for Wealth Preservation. I believe that we might be getting closer to one of those good opportunities for Precious Metals – particularly Gold in 2022.
Gold last went on a big run not so long ago. From early 2019 until mid 2020 it went from about $1300 USD to $2000 USD in the space of about 18 months. A rise of over 50%. But just when it looked like the US was going to have it’s “Blue Wave” and start printing the USD into oblivion, the rally stopped. We HAVE had an outbreak of significant inflation in the US and along with it fairly severe Negative Real Interest Rates (Nominal Interest Rates minus Inflation) but Gold hasn’t done much at all for the last 18 months. In fact it has been suspiciously quiet during these unprecedented times….
Maybe the manipulators have kept it under wraps, or maybe the big run up to $2000 USD in 2020 needed some time to be properly digested. Regardless of the reason why, the Fundamentals for Gold are particularly strong right now and it is starting to look like Gold might be getting ready to break free. The Technical Analysis suggests that a Pennant formation has been forming, but on the shorter term timeframe it is looking like its coiling up – A sure sign that a big move could be about to get underway.
Exciting times if you’re a HODLer of Precious Metals