Alasdair Macleod told King World News that the gold price is set to ignite and $2,000 gold will soon be history.
Two charts that tell the whole story
August 26 (King World News) – Alasdair Macleod: First up is gold in US dollars. Note the established and very important trend line, which has now been tested six times on intraday dips. The last test was today. It held and gold is now ready for the next move up. My guess is the $2k level will soon be history. And with the consensus thinking that gold has not finished backing and filling, yet again they have missed the chance to buy more under $2k.
The next chart shows why gold is heading a lot higher, and quickly. It is of US dollar M1 money supply since 1980.
Note how there have been three phases, each one more inflationary than the last. Since 23 March — which coincided with the start of gold’s trend shown in the first chart — the trend has gone almost vertical.
Now factor in the following. Commercial banks are reluctant to lend because of escalating loan risk and their already high balance sheet gearing. If the Fed is to stop the economy descending into the worse slump in modern times (Covid-19, US/Chinese trade wars etc.) then narrow money supply will have to increase even further to compensate. If growth in M1 money is not rising vertically, then it soon will be.
Remind you of anything? It reminds me of those charts of price inflation in 1920s Germany.
That is why that trendline in the first chart of the gold price held, and why we should expect gold to really take off.
You are either in or out.
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