| All the news for gold, both technical and fundamental, continues to get more positive almost every day.
 
This is the fabulous big picture gold chart. The price appears poised to begin a major move to the upside. That should see the world’s mightiest metal test the $1900 area highs.
In gold market infrastructure news, precious metals processor Heraeus just opened the world’s most modern processing plant in Nanjing, China.
They are predicting a 20% increase in across the board precious metals demand in China over the next decade. How are the world’s mines supposed to provide this gold when global mine supply is peaking? They can’t, so… the price must rise.
This is spectacular news. The WGC (World Gold Council) has essentially reinvented itself. It is now a pro-gold industry body working diligently to support higher prices in the decades ahead.
In my professional opinion, the WGC’s move into China is another step forwards. It is taking gold out of the dingy fear trade rooms of the West and putting it back in its rightful place as the world’s most respected asset.
The WGC move into China will bolster its power in the world gold market and give it more “teeth” when dealing with the Indian government.
The WGC has recently been putting serious pressure on the Indian government not to raise the gold import tax, and that pressure appears to be paying off in a positive way.
The WGC is forecasting a massive 25% surge in gold demand for the second half of India’s fiscal year.
There’s more great news. Barrick and Rangold are merging to create a mega-producer! I recently began accumulating Barrick stock and this fabulous news is an incentive to ramp up my accumulation.
I urge gold bugs around the world to pay tribute to the world’s largest producer. Buy at least one share of stock, just to be part of a new and awesome chapter in world gold mining history.
As good as it is today, can the news for gold get any better? Yes, it can. Dick Bove is America’s greatest bank stock analyst. His opinions and statements carry strong influence amongst institutional investors.
Like me, Dick suggests the world may be (and should be) headed towards a kind of “Plaza 2.0” agreement, where a massive dollar devaluation takes place.
A lot of gold investors are republicans. They believe the socialist policies of US democrats will cause the dollar to crash. While it’s true that socialist policy can weaken fiat currency over time, US government debt also has a history of rising under republican administrations.
It’s also a fact that republican administrations have a tendency to want a weaker dollar for trade purposes; the Plaza Accord of 1985 took place under a republican administration.
While he raises the already-insane US government debt, Trump is isolating America’s government from the rest of the world’s governments. They are annoyed by his aggressive speaking style and his interesting “My way or the highway!” approach to tariffs.
Recent polls suggest that he risks losing both the US congress and senate to the democrats, and if that happened he would face tremendous pressure to do something to remedy the growing isolation of America’s government in the world government community.
If Trump is serious about reducing America’s gargantuan trade deficit, tariffs that push the yuan lower aren’t going to get that job done. If he’s faced with a democrat congress and a democrat senate, he’ll need to consider dollar devaluation or a gold buy program.
If the democrats take control of either congress or the senate, Trump will also likely launch an enormous US infrastructure spending program to divert democrat anger.
Infrastructure spending is quite inflationary, and in the current environment, so are rate hikes and accelerated quantitative tightening.
On that note, tomorrow is what is arguably the most important Fed meeting in many years. Jay Powell is poised to raise rates in September, something that Janet Yellen was afraid to do because of the potential damaging effect on the US stock market.
Gold has a history of rising after most rate hikes and does so quite significantly. I’ve noted that June is the exception to that rule, and this year gold was again weak after the June hike.
This is the interesting GDX chart. GDX appears to be carving out a beautiful inverse head and shoulders bottom pattern on the daily chart and the price action of Barrick suggests good times lie directly ahead for most of the world’s gold stocks investors.
A light pullback towards $18 followed by a two-day close above $19.50 is what I’m looking for, to get the good times rolling!
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