June 26, 2020 - (Gold Market Wire) - Gold's trend line is developing slowly, marking out our first level of support, this European a.m. We have touched down on it and now we will see if the recent move can be sustained.

The gap up remains intact and the trend and the overhead will converge before too long. So far a normal, if shallow, back and fill for the gap, so a further move down should not be surprising. Gold remains a trusted asset, with an increasing number of investors more convinced of its sustainable value than that of equities, and certainly that of no-yield bonds. We remain vigilant over the direction of global stock markets, which continue to look wildly over bought. Another flushing, could, of course, impact Gold.

Sooner or later (probably sooner), the myriad of outstanding small business loans that have been extended over the past five years are going to cascade into the non-performance category. While the major investment banks of the world spent the past quarter of a century using depositor funds to trade derivatives, emergent private equity went out and gobbled up global assets across the planet. Bain Capital's acquisition (at a fire sale price, surely) of airline Virigin Australia will be one of many to come, one expects. The public doesn't participate in such bargain shopping. Instead, Mom and Pop shops are being shuttered.

Bank solvency will become an issue, along with the added fear that systemic issues could easily arise. That puts deposits on the chopping block, and a full-scale economic meltdown could ensue. How, one may reasonably ask, is faith ever to be restored in the banking systems of the world? Is the western world simply to put 250 million people on Universal Basic Income - forever?

In such an environment, Gold prices would seem capable of falling only so far. Surely, there is little chance that the bull market, in effect for several years now, will come to a close. That's gives the optional benefit of the doubt to the metal.

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