After such a significant move in the gold, silver and mining share markets, today King World News thought it was a good idea to take a step back and look at the big picture of the war between gold and the Federal Reserve. This led to a remarkable question: Is the price of gold headed to nearly $20,000?
MacroTrends: This chart (below) shows the ratio of the gold price to the St. Louis Adjusted Monetary Base back to 1918. The monetary base roughly matches the size of the Federal Reserve balance sheet, which indicates the level of new money creation required to prevent debt deflation. Previous gold bull markets ended when this ratio crossed over the 4.8 level….
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King World News note: The chart above reveals just how far the bull market in gold has to run before it ends in exhaustion. Gold would have to advance more than 14-times in price vs the monetary base in order to hit the 4.8 level highlighted above. If the monetary base just stayed stagnant and the 4.8 ratio is hit, that means the gold price will be close to $20,000.
King World News note on chart II (below): There is a massive chasm between the Fed’s balance sheet and today’s gold price, even with the recent advance in gold. This is one of the many reasons the gold price is set for a historic upside surge (see chart below).
Fed Balance Sheet vs Gold Price
King World News note: This shows the long-term Gold/Oil Ratio has moved solidly in favor of gold, and is still trading near the all-time highs (see chart below).
King World News note: The massive change in trend in the Gold/Oil Ratio chart above is yet another reason why the mining shares are still under accumulation by strong hands. The smart money is buying while the mining shares are still near an all-time historic low vs the gold price (see chart below).
Multi-Decade XAU vs Gold Ratio
King World News note: The bottom line is whether the price of gold is headed to $20,000 or not, investors should be accumulating physical gold and silver while they are highly discounted because of U.S. Fed interference in these key markets. ***KWN has just released the jaw-dropping interview with the man who advises the most prominent sovereign wealth funds, pension funds, hedge funds, and institutional funds in the world CLICK HERE OR ON THE IMAGE BELOW.
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