Gold Canary
Gold rise, is it a canary signal?
Gold has risen from $1,991 per ounce on February 13th, to $2,171 as I write this. An increase of $180 per ounce in less than a month (and still rising). That’s a 9% increase in one month.
That’s a great rate of return for something considered as the safest most conservative asset to hold!
At first, the rise was explained by saying investors were anticipating an interest rate drop even though the news from the Central Banks was mixed (no clear signal that a rate drop actually will occur soon).
In the gold news circles, it’s also mentioned that the Central Banks are continuing to buy up a lot of gold and maybe that is why the price is going up.
This is a year of exceptional political tumult also. That is another excuse for gold being valued higher.
In the aftermath of the financial disaster of 2007/2008, gold rose from $1,482 on July 1, 2011 to $1,873 on September 2, 2011. A much more substantial rise of $391 per ounce (over 26%).
If we repeat that, we might see gold as high as $2,516 per ounce in another month.
Remember that “pricing” is relative. A high value for gold simply means the USA dollar is less valuable.
We know the USA empire is in decline. Any time we see a rapid rise in the value of gold relative to the USA dollar we should consider the possibility of this being an indicator that the national economy is in worse shape than is being reported.
In my opinion, it’s unlikely that we will see a sustained drop in the price of gold until after the elections, more likely sometime next year. Or if people realize that the US dollar is vaporware upon which the world economy has run for the past seventy years we may see even more economic trouble worldwide and an even greater increase in the value of gold.
All is not rosy in the land of “Bidenomics”.
Are we looking at the canary that is warning us of the danger of our coal mine?
Astute observations. Of course, the markets are always more volatile in an election year and especially as the electron draws near. That said, there is definitely some concern among many of a coming major market correction. I can certainly see the potential, and the price of gold may be a portent.