Gold has risen in USD price from about $1,150 at the start of 2017 to about $1,300 today; an increase of around 13%, nearly 25% on an annualized basis. Furthermore, the ‘hot’ season for Gold prices is just around the corner.
Diwali buying by the Indians, Chinese buying for Chinese New Year, the Russians central bank adding tons of reserves, the Muslim world starting to buy with the newly minted Sharia Gold agreement… and major buying by the Turks, around 60 Tons just last month. With Eastern buying soaring, there is plenty of ‘love trade’ to drive the Fiat price of Gold even higher… yet Westerners are seemingly not buying. What gives?
Do Eastern buyers know something Westerners don’t? Have Western Gold ‘bugs’ been brainwashed by the banksters to the extent that Gold is totally out of favor, in spite of ‘facts on the ground’? With civic unrest on the rise, U.S. presidential political wars, more troops to Afghanistan, more lethal weapons to Ukraine, more military muscle flexing towards China and North Korea, more neocons in the White House, more terrorists to Europe, there is plenty of ‘fear trade’ incentive to drive the Fiat price of Gold even higher.
Nevertheless, Western Gold buyers are seemingly asleep; the SPDR fund reserve went under 800 Tons, the US Mint reports slack sales of Eagle and Buffalo coins, and Mr. Barton reports that he had to ‘ring the service bell’ at his favorite coin shop to attract a sales person. Really now, what gives?
Perhaps most Western buyers are ‘tapped out’… with barely enough currency to exchange for food, never mind for Gold or Silver… after all, near 50% of the US population is on food stamps… perhaps Gold coin dealers do not accept food vouchers in exchange for coins. Or perhaps most ‘discriminatory’ funds available to US citizens are being spent on guns and ammo… is this why S&W, Ruger, Colt shares are spiking?
Whatever the reasons, the reality is irrefutable. Gold sales in the West are stagnant. Wealth is flowing from West to East, as is civilized culture, as is manufacturing, as is military power, as is agriculture. Russia has reported record bumper crops in wheat, rye, and other grains not seen since the USSR broke up. Gold follows wealth; or wealth follows Gold. I suggest Gold and wealth are the same; both are leaving the West and are heading East.
Now let’s stay realistic; while the overall status of East vs. West is clear, that is no reason to believe that individuals must go with this flow. Every person, whether Western or Eastern, must make his or her decision regarding ownership of the monetary metals, regardless of the ‘big picture’.
As I write this article, Gold has broken a major long term downtrend in play since September 2011. The major funds were waiting for the trend line to be broken; and now are starting to allocate Gold to their portfolios. The SPDR fund has just announced holdings rebound to over 810 Tons. This (belated) Western fund buying simply adds to the momentum being developed by Gold… and Gold mining shares. The GDX is spiking, breaking $24.00 and seemingly heading higher.
As for the other monetary metal, namely Silver, it is also starting to move up vs the USD… In general, both Gold and Silver move together; sometimes one leads, sometimes the other… but they are joined at the hips. Many Silver bugs prefer Silver over Gold, as it tends to greater volatility, thus offering greater potential Fiat gains.
All this adds up to just one thing; the Golden opportunity is upon us. If you have not allocated Gold to your portfolio, it is time to do so. If you already hold some Gold, it’s time to add to your hoard. Such a positive alignment of fundamentals and technical is rare indeed. Far be it for me to try to push any fear or greed buttons… but such golden opportunities are ‘once in a lifetime’.
I strongly suggest you head out to your favorite coin shop, ring the bell, and sell some Fiat paper in exchange for real money; Gold or Silver. If you delay, there is likely to be a large queue developing soon enough; beat the Gold rush while you can. Remember the famous words; “There is no rush like a Gold rush”.
Rudy J. Fritsch