With everyone focused on the Fed meeting, 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 above $12,000?
MacroTrends: This chart (below) shows the ratio of gold (priced in dollars) to the S&P 500 market index (currently .56). This ratio is a good indicator of investor confidence in the dollar/fiat currency system. A low ratio signifies high confidence (gold low, S&P high) and a high ratio signals a lack of confidence (gold high, S&P low). The ratio hit a peak of 5.94 back in January of 1980 when gold briefly traded over $800 an ounce.
King World News note: The chart below reveals just how far the bull market in gold has to run before it ends in exhaustion. Gold would have to advance 10.6-times in price vs the S&P 500 in order to hit the 5.94 level highlighted above. If the S&P 500 just stayed stagnant and the 5.94 ratio is hit, that means the gold price will be over $12,000.
King World News note: This shows the long-term Gold/Oil Ratio moving solidly in favor of gold (see chart below).
King World News note: There is a massive chasm between the Fed's balance sheet and today's gold price. 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: The massive change in trend in the Gold/Oil Ratio chart above is the reason why the mining shares are under accumulation at these levels. The smart money is buying while the mining shares are at 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 above $12,000 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. If you are interested in purchasing physical gold and silver for delivery you can call Steve Quayle or his staff at (406)586-4842, or you can email them at info@sqmetals.com
***ALSO JUST RELEASED: Richard Russell – Central Bankers Move To Protect Themselves Ahead Of Historic Global Crash CLICK HERE.
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