Comment by chaostheory
Comment by chaostheory a day ago
IMO this is temporary. Why?
1. Geopolitics. Globalization is dying. See 3.
2. Debt. Countries refuse to tax or do austerity. The only thing left is to destroy their currency by printing away their debt.
3. Preparation for a new global war which requires massive spending.
4. Basel III which made gold tier one. Unallocated gold does not qualify as a tier 1 asset
The risk for Central Banks holding their own bullion is low, away from the almighty Dollar, and Gold has never ceased to hold value, while Silver is actually useful but seriously overbought.
We're actually paying a premium for risk-averseness in the very nature of Gold, an asset that produces no dividends other than holding its own intrinsic value.
This time the bullish-on-Gold news outlets are right: there are fundamentals driving the madness that is the Market.
Something about Japanese rice futures candlestick school of days past predicting sell-off after 8 to 10 sucessive record highs...
Summing it up, the volatility specially of Gold (Silver is a bubble may I remind you) doesn't discount the possibility of an overall upward trend of years for Gold and a respectable USD$4000 for the spot troy ounce does not seem crazy at all, as momentum builds for regime change in Iran.
It's a plain analysis. Trump may not TACO on this and after hell on Earth is unleashed, Gold will actually see action to unprecedented levels. Maybe. Maybe not, but USD$4000? I doubt very much it would break through that support level.