There’s an increasing number of professional money managers who think it will be gold which has been trading more like a currency than a commodity recently. If the dollar is no longer king then gold looks like a worthy successor. – Arabianmoney.net (LINK)
Several analysts, including myself, have pointed out that recently gold has been moving in correlation with the dollar rather than inversely. While many are not aware of this, the two huge moves higher made by gold during this long term bull market occurred after gold traded for a couple months in correlation with the dollar.
Gold has actually been tracking the US dollar’s advance but it has now decoupled and should go in the opposite direction. Gold is after all the classic hedge for dollar weakness. There’s another reason to think the price of bullion will surge from here.
The argument that higher US interest rates are coming is what has kept the price of gold down…Now that the Fed has taken its foot off the pedal for interest rates therefore gold prices should no longer stay low. And once investors wake up to the fact that interest rates are actually going to stay low for much longer then logically gold prices should be heading up and up. – Arabianmoney
As many of you know, several of the United States’ long time allies/lap dogs have been joining China’s Asian Infrastructure Investment Bank. This is not just a blow to the U.S.-controlled IMF, it’s a direct blow to the dollar: “China has won, gaining the support of American allies not just in Asia but in Europe, and leaving America looking churlish and ineffectual.” Believe it or not, that quote comes from The Economist on this matter.
I have been suggesting that the recent parabolic move in the dollar is the signal that something has melted down behind “the curtain.” That “something” could be the dollar itself. If that’s the case, Jim Willie’s prediction that the dollar will die in 2015 will ring true and gold will take off. In fact, Rory and I are hosting Jim Willie this Monday on our Shadow of Truth podcast show and we will talk about this topic.
Everything unexplainable happens for a reason and perhaps the dollar’s imminent demise is the reason that China has accelerated its gold buying this year. Yes folks, the WGC has it wrong again. Based on deliveries into and withdrawals from the SGE – I track both numbers (deliveries daily and withdrawals weekly) – China’s gold buying YTD is at least 15-20% above 2014.
Gold is about to have its run as a speculative currency vehicle as the ultimate money that no central bank can print. When currency markets give up on central bankers where do they go? – Arabianmoney