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Gold Price Expected To Rise Significantly Soon


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'They' are crushing the money supply.  When you have pressure on the value of stocks and real estate there is less speculative money for commodities that are nonessential.  Some speculators have to sell gold or will sell gold to pay for other things.  That becomes a temporary scenario rather than price up because of world instability and the cost to mine gold going up.  Crypto is under the same pressure.

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Someone correct me if I'm wrong here. But I think gold actually is still an inflation hedge and everything is still working as normal for the rest of the world. Just not in the US right now, because our currency is at historic levels of strength right now. IE - the rest of the world has much worse inflation than we do.

Consider how strong the dollar has been against the Euro and Pound, here is a 1 year chart:

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Now look at the price of gold when priced in British Pounds - gold appears to have hedged against inflation nicely for Brits. Same with most of Europe, and Australia. Because gold has stayed more or less stable or gone down just slightly in USD, but the USD went way up compared to the pound and other currencies.

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So it depends on what lens one looks at gold through, it seems. As it stands now, it appears that even though US inflation is a major concern, it's a bigger concern almost everywhere else, and so for us - gold isn't hedging anything at the moment since our currency is so strong, relatively speaking. Which means it's been better to own US dollars than gold here lately.

Also, in a global society with instant currency trading, gold no longer seems to be a hedge against inflation at a national level, it's more a multi-national inflation hedge now since one's own inflation rate doesn't matter but instead one's inflation rate compared to the rest of the world. Which brings up the question what exactly is the proper hedge against our local USD inflation on the smaller national (US) level now? Some commodity that isn't traded globally? Does it even exist? Real estate? Or, just owning USD is paradoxically a hedge against it's own inflation as long as it's better than the inflation elsewhere?

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Yep, the US dollar is going up for various reasons, not only the rising interest rates and other factors but also as people are buying it for a safe investment as you need USD to buy US bonds, a really safe investment in troublesome times, the more people that buy the USD then the demand helps push the USD up even higher.  Currency traders are also all buying the USD at the moment as they know investors are going to be buying US bonds which they need to have USD to buy so the traders can make a quick buck on the USD rising.  

The worse the situation in the world is the higher the USD will go and I guess as Jason pointed out the less value gold will have for those in the US but not necessarily the rest of the world.

The Brits are a real mess and the tax cuts they're doing for some strange reason will only accelerate their inflation so gold is a good investment for them.

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even here in Aussie, I like the idea of gold and or silver as a long term hold, after all gold and silver, well gold more so, has stood the test of time for thousands of years, just in my opinion way better to be physically  holding precious metals than any FIAT currency when/if the sh!t really hit the fan, I think the old Egyptians and Incas new something :nugget:

cheers dave

 

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Give me gold and silver any day, a strong U.S. dollar maybe a good thing for import prices. cheaper foreign goods for us. A high dollar is bad for exports manufacturers. but in these turbulent times when everything just doesn't make sense its not good. Look at the prices of consumable goods, food and fuel are going up,up. Should we still be buying cheap Chinese goods? We have never seen such a bad economic convergence globally making this the biggest global bubble ever. IMHO the biggest economic butterfly effect is emerging one bigger then the one that destroyed the German economy under Mr. Mustache. Start stacking...

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jasong brings up a good point that asset prices are not absolute, but relative to other assets. When we quote the price of gold, it's usually in USD. That said, what's the price of USD?

The US Federal Reserve has been the most aggressive in raising rates, which is attracting capital looking for yield, and as Phrunt points out, safety.  

Gold in Yen is up over 20% in the last year, but the Japanese central bank is bent on keeping rates at zero. So much so that it recently stepped in to prop up the Yen for the first time since the late 90's. 

Ultimately, I cognitively separate the riddle of the gold markets and riddle of putting gold under the coil or in the box. It's a certainty I will still be avidly reading this forum and on the hunt if gold trades back to a sub $300 range. (In USD to be clear!)

 

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I agree with mm90403 , there's less spendable cash in the US,.     With fuel prices hovering around $7 here in SoCal at the moment. Goodson services are at all time high, I don't see gold prices going up, unless the US government gets rid of paper money and tries to go digital.

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I feel gold will continue to drop up into early 2023, how much impossible to say.  Maybe another 10-15% maybe even 20%, Flatten out for a period then take off.

Just retired this past April, will make it a point to visit more often this is an interesting thread.  Lots of good information, appreciate everyone's input.

Paul

 

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  • 3 weeks later...

Try to buy gold coins at a reasonable markup over spot.   Most small denominations are not available at all at Kitco.

vintage "bullion" coins price sometimes move up as the gold price drops. (due to a shortage I suspect: seller cannot replace.) 

If you don't hold your gold, you don't own it.  If you hold paper you've got zip. 

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