Gold Breaks Out Big Ahead of G20 Summit

Gold Market Discussion

Get Ready for the Global Currency War!

Bloomberg writes this about gold: “Futures post the highest close in six years; funds pile in.”

With gold hitting six-year highs, major institutional financial analysts around the world have been busy revising upwards their precious metals price targets.

Here’s a sampling of comments and observations about the precious metals bull market:

 “Gold bulls are back in control,” said one analyst in a Bloomberg article. 

Michael Oliver, a technical analyst, said in an interview, “By the end of the year we should see $1,700 in gold. That’s not the end, it’s just where it will be at year-end. We’re in a major situation.

John Rubino headlines a piece about silver this way: “If History Still Matters, Silver Is Poised For A Huge Move.”

Agora Financial wrote this week, “This could be your last chance to hold physical metal before the masses come rushing in.”

Jim Sinclair, a veteran precious metals analyst, called the timing of the June breakout in precious metals with amazing precision.  He called for the breakout within a couple of days.  Now, says Sinclair, we’ll see a complete monetary re-set by 2024, or heading into 2025, with a gold price so high, I won’t even repeat it here.  Not because I disagree with Sinclair, but because at that point, the dollar price of gold will be much less important than how many ounces of gold one owns. 

Most of the commentary about the gold and silver breakout refers to trigger events like the Fed’s recent meeting and the Iran situation.  The importance of both of those cannot be overstated.  We have emphasized both as our regular readers will know.

But there are gathering storm clouds that are being overlooked by most commentators: economic darkness approaches in the form of a developing currency war. 

We have observed that the world – including the US – is headed pell-mell into this off-shoot of the trade war.   A currency war is a form of financial madness in which the winners are said to be those that most thoroughly destroy their currencies’ purchasing power.  

We have been warning about the escalation of a global currency war for a long time, but have increased our warnings and sense of alarm recently (see here and here), warning that gold is always the big winner of currency wars.

In Trump Calls for Currency War with China, we were explicit that the new monetary calamity was hard upon us:  “A currency war is about to break out.” 

“These policies are unreservedly bullish for gold.  All paper currencies are discredited as they each fight their way to be the cheapest.  Since they can’t all be the cheapest, successive rounds of devaluation can become quite frantic as they all fight their way to the bottom.

“When countries devalue their currencies, they are ultimately devaluing them against gold, the true supra-sovereign global currency 

“That means the price of gold goes up!

“The best way to protect yourself from a currency war is to own gold.”

We want to call your attention to the fact that the breakout in gold and silver comes just ahead of the G20 meeting of nations in Japan.  Only one other analyst that we have seen also notes the direct linkage between the price movement in the metals and the G20 meeting.  It is his view that the Japan summit will result in a sharp devaluation of the US dollar, somewhere on the order of 20-25 percent.

If that is the case, the price movement we have seen in the last month is only the beginning of what is to come.

Only a very small beginning.


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