Gold Market Wire
News, analysis and commentary for gold traders and investors
Gold Market Update
Gold Stakes Out New Uptrend
April 24, 2020 - (Gold Market Wire) - Gold is looking to challenge the horizontal resistance and intraday high at $1739 that was set in the past two Thursday sessions. It's a struggle, but the bulls are slowly chipping away at it.
All of this is taking place amongst a Euro/USD rate that keeps falling, making the strength behind Gold all the more impressive. With the world monetary system in disarray the US Dollar and Gold, together, and not in opposition, are proving to be the world's safe havens.
Few will want to take a short position home over the weekend. Fewer still will want tobe flat and out of the market during such a juncture in world history. With no sense of hyperbole at all, quite honestly, anything could happen. Many will be watching the planned "reopen" events scheduled this weekend in Texas for signs of confrontation between authorities and citizens. We are approaching a true watershed, politically, in western world history.
There can be little doubt that the US Government's $2.5 trillion spending spree, along with the EU's planned (and slow to develop) $1 trillion and the member states own actions to bridge loans and keep payrolls rolling have sent the monetary base into an explosive upward trajectory. But those figures simply pale in comparison to the (likely) $50 trillion+ that has been eviscerated out of the western economies because of the shutdown. Mass deflation is taking hold - which is always the sign of a true depression...if not, in fact, a total capitulation of the existing economic and social order. When the money printing fails again, as it has since 2008, more drastic measures will be levied, this time truly draconian ones, as taxes rise to unimaginable levels and governments seize control of entire economies, causing the formation of capital to cease.
When this next stage develops, money itself may fail as government cancels currencies and puts the whole population on income support in a Venezuelan-style exercise of pointless destruction.
In such an environment Gold is highly likely to soar above $2000 an ounce - and that day may be closer than most think. The wholesale failure of the European banking system will be the first major explosion of that trajectory. Goldbugs may rejoice at a rising Gold price when it happens, but there will be little to cheer about as the most dramatic economic catastrophe of the past 200 years of western history begins to exact its toll.