Gold: New 2017 High


Guest Post from Stefan Gleason, Originally Published on
Money Metals Exchange

Gold’s naysayers and doubters came out in full force earlier this summer as sentiment reached its nadir. The mid-year pullback in prices did, too.

There can be no doubt about it now – gold has broken out of its summer doldrums. On Monday, the yellow metal finally broke through the longstanding $1,300/oz resistance zone to make a new high for the year at $1,316.

Assuming the breakout holds, the next upside target is $1,375/oz, the high point for 2016.

There are plenty of bullish factors behind gold’s recent upside momentum to continue pushing prices higher in the days and weeks ahead. The gold mining stocks are starting to show relative strength again. And the U.S. Dollar Index appears to have begun another new down leg this week, falling Monday to a two-and-a-half-year low.

Another bullish factor is geopolitics. Gold gained a few more dollars in early trading Tuesday morning in Asia after North Korea launched a missile over Japan. Japanese Prime Minister Shinzo Abe said, “Their outrageous act of firing a missile over our country is an unprecedented, serious and grave threat and greatly damages regional peace and security.”

 

On any ordinary news day, this dangerous provocation from North Korea would be the top story on all the cable news channels. Hawks would be calling on the U.S. to retaliate, and doves would be warning of the potential for millions of deaths in the event war breaks out in the densely populated region.

For now, though, the unprecedented flooding caused by Hurricane Harvey is the Trump administration’s top priority. Early estimates are that the storm has caused $40 billion in damage. Water levels are still rising in Houston, and surrounding areas extending to Louisiana, so the scale of the catastrophic losses stemming from 11 trillion gallons of water will continue to grow in the days ahead.

Several major oil refineries have been shut down by the storm. However, crude oil production is little affected. Oil inventories are expected to build even as gasoline prices rise (gasoline futures jumped 3% on Monday).

The disaster is bringing Americans from disparate backgrounds and worldviews together, united in a common purpose to help provide relief to those in need. Perhaps Congress will set aside some of its partisan acrimony when it goes back into session next week. Unfortunately for taxpayers, though, outbreaks of bipartisanship are usually associated with emergencies that cause both sides to agree on even more spending.

 

The political pressure to make sure federal agencies are equipped to handle Harvey relief efforts (which will be ongoing for months) figures to be overwhelming. Conservatives who had aimed to force concessions in an upcoming budget fight may conclude that they now have no leverage to do so.

President Donald Trump so far hasn’t backed off his vow to pursue border wall funding even if Congress refuses and a government shutdown occurs. But a government shutdown in the aftermath of a major natural disaster could be a political disaster for whoever gets blamed for it.

With so many risks hitting investors this week, it’s no surprise that the gold market is benefiting from safe-haven inflows.

Silver is benefiting as well. Although the silver market has not yet hit a new high for the year, prices advanced nearly 2.5% Monday to close above the 200-day moving average.

If silver can now start showing leadership, that would be bullish for the entire precious metals complex. The gold:silver ratio currently stands at about 75:1. Gold is still trading at a high price historically relative to silver.

The ratio can move rapidly to the downside when silver prices are surging. That was the case from late 2010 to early 2011, when the ratio dropped from the high 60s to the low 30s. An even bigger move could be in store for those who buy silver now, while the gold:silver ratio is still in the 70s.

Stefan Gleason is President of Money Metals Exchange, the national precious metals company named 2015 “Dealer of the Year” in the United States by an independent global ratings group. A graduate of the University of Florida, Gleason is a seasoned business leader, investor, political strategist, and grassroots activist. Gleason has frequently appeared on national television networks such as CNN, FoxNews, and CNBC, and his writings have appeared in hundreds of publications such as the Wall Street Journal, Detroit News, Washington Times, and National Review.

 

Thanks to:  Stefan Gleason, Originally Published on Money Metals Exchange

Also Read:  Gold to S&P 500 Ratio Flashing Major Buy Signal

 

Gary Christenson

The Deviant Investor

One thought on “Gold: New 2017 High

  1. We must remain open minded… history dictates that governments do not allow competition with their
    counterfeiting schemes… there’s a reason why those millions of Roman base metal coins
    continue to be unearthed in Britain…people were hiding them !

    I sat through a 2 hour Stephan Molyneux lecture on the fall of the Roman empire… I’ve highlighted
    some of the important points he made… “there are no new ideas, just old repackaged ideas, and
    historical amnesia” from my book “Stripes of betrayal”.

    NORFED tried to compete with Liberty dollars…the FBI confiscated and never
    returned $20 million in private held gold. I don’t know how this will end, I just know that money
    isn’t money until people think it’s money, and that most of the US population are unprincipled
    fools with no idea how to find their way back, actually, no idea what “back” even means.

    THE FALL OF ROME (condensed in 13 points )

    https://www.youtube.com/watch?v=qh7rdCYCQ_U

    So I sent out the link for Stephan’s 3 hour fall of Rome

    lecture.. I’m pretty sure I’m the only one who sat through

    all of it….

    I took a few notes …

    1. Rome began it’s European expansion bringing prosperity

    to regions that lacked organization and lawful

    commerce… those area’s largely welcomed

    Roman civil law, and the profits that came with it.

    2.The roman Navy patrolled shipping lanes and eradicated

    pirates that threatened free commerce.

    3.The prosperity of the roman state created the Roman

    government… the government was a direct reflection

    of the people.

    4. If the people don’t like the government they will not

    work to support it.

    5. As the currency was debased and lost value, the size

    of the military increased, both to plunder the resources

    of other nations who refused Roman coin, and to quell

    dissent of Roman citizens who no longer supported the

    government (that they allowed) to grow up around them.

    6. The military was eventually paid in undebased coin

    not made available to the populace.

    7. The number of recorded ship wrecks diminished,

    as international shipping trade came to a virtual

    stand still.

    8. Expats began to renounce their citizenship and leave

    Roman territories… the Emperor responded by ordering

    fleeing farmers to stay and keep producing crops and

    goods for the government… this was the ancient version

    of a price freeze… this is being done in Venezuela now.

    9. The military began to disband… the government filled

    the void by hiring former enemies of the state to act

    in a military mercenary capacity against the people…

    some of whom were ” Barbarian Germanic tribes”

    who would eventually overthrow and occupy Rome.

    10. Black market activity that evaded taxes was punishable

    by death.

    11. Coins that were once 95% gold or silver , were reduced

    to 5%…. then became copper, iron , or bronze and were

    rejected in foreign trade.

    12. Toward the end , civilians were enslaved to work

    abandoned farms and feed the government and military.

    13. Christianity was adopted early on to pacify the masses

    and divide the populace into smaller more controllable

    groups… Constantine would unite the religious gangs and

    bring one last gasp of prosperity in the final 151 years of

    the Roman Empire.

    There was much much more in this lecture that I didn’t

    jot down..

    For all points made above, I can show at least one

    example of US government actions that mirror them today!

    History repeats… It’s why I’m so skeptical about all

    those Trump promises…

    It would be one thing for Trump’s intentions to fix just a few

    things…but to claim he’ll fix all of them? it’s just too

    disingenuous to be anything but scary….

    The gullible buffoons who comprise most of this nation

    are in for a cruel surprise…

    maybe not as cruel as what Hillary had ion mind, but

    cruel none the less.

    If anyone wants to add more points about Roman history

    being repeated , I’d be happy to read them.

    ?


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