Why Gold?

Tensions of all sorts are on the rise in the US , EU, and globally: Covid, employment, fiscal stimulus China (military and economic), and massive increases in money supply by the central banks, especially the Fed. 

Cup and Handle

The Cup and Handle is a technical formation. A handle is formed on a pullback before the pattern blasts higher.

Of course, there may be no handle. Gold may just blast higher (or collapse) but fundamentals suggest higher, perhaps after some consolidation.

Gold vs Faith in Central Banks

Gold vs Faith in Central Banks 2020-01-01 PNG

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Gold does worst when faith in central banks is the highest. Greenspan's great moderation is the best example. Greenspan was considered the great "Maestro" who could do no wrong.

That theory crashed to earth in the DotCom bust. We have now had 3 major economic bubbles in 20 years.

If you currently have any faith that Central Banks have things under control, then please explain where you got that notion.

It should be obvious that the Fed is boosting financial assets but that is not going to create jobs or cure covid. 

In short, the Fed is blowing bubbles, many believe on purpose, and gold has responded to the stress. 

I do not see a reversal in Fed policy. Do you?

Mish

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Gold broke out of a six year consolidation. Things look up in 2020.

Gold Knocks Six Times on the Ceiling

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Gold is Not a Function of the US Dollar Nor is Gold an Inflation Hedge

Swings in the US dollar have no long-term impact in the price of gold. Nor is gold an inflation hedge.

Peak Gold? No: Peak Gold Production? Perhaps

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Gold's New Breakout is Very Bullish: Here's Why

Gold hit a new high for the move to $1714 and a new closing high of $1707. Additional charts explain the significance.