What in the world is happening to Gold?
Gold prices are up a MASSIVE 28% in 2024 to a fresh record high of $2,660/oz.
This puts Gold on track for its best annual return since 1979, all while the Fed is calling for a "soft landing."
Is Gold telling us something?
(a thread)
Gold prices are up a MASSIVE 28% in 2024 to a fresh record high of $2,660/oz.
This puts Gold on track for its best annual return since 1979, all while the Fed is calling for a "soft landing."
Is Gold telling us something?
(a thread)
If Gold closed at its current price on December 31st, it would post its best year since 2010.
However, if the current pace of the rally continues, Gold could see its best year since 1979.
That's when gold rose 126% in a single year.
Gold is trading like we are in a crisis.
However, if the current pace of the rally continues, Gold could see its best year since 1979.
That's when gold rose 126% in a single year.
Gold is trading like we are in a crisis.
So what is happening?
First, you'll see all the headlines attributing gold's rise to geopolitical tensions around the world.
While this is certainly a factor, there must be something bigger at play here.
Even when geopolitical tensions calmed, gold hit new highs this year.
First, you'll see all the headlines attributing gold's rise to geopolitical tensions around the world.
While this is certainly a factor, there must be something bigger at play here.
Even when geopolitical tensions calmed, gold hit new highs this year.
This leads to the next major driver of gold prices: the Fed.
We had a surprise 50 basis point rate cut and base case showing at least one more 50 bps rate cut this year.
The Fed is cutting rates like we are in a recession while calling for a "soft landing."
It doesn't add up.
We had a surprise 50 basis point rate cut and base case showing at least one more 50 bps rate cut this year.
The Fed is cutting rates like we are in a recession while calling for a "soft landing."
It doesn't add up.
We've been providing outlook for interest rate policy and how it is a MAJOR driver of ALL markets.
Get ahead of the Fed move and you win in this market.
Consider subscribing at thekobeissiletter.com to see our latest outlook.
But, this isn't the main driver of gold.
Get ahead of the Fed move and you win in this market.
Consider subscribing at thekobeissiletter.com to see our latest outlook.
But, this isn't the main driver of gold.
The real issue here is that US Federal Debt is out of control.
Interest expense on US Federal debt is now at a record $3 billion PER DAY.
This is TRIPLE the amount paid 10 years ago and has DOUBLED in 2.5 years.
Total annual interest costs reached $1.1 trillion in Q2 2024.
Interest expense on US Federal debt is now at a record $3 billion PER DAY.
This is TRIPLE the amount paid 10 years ago and has DOUBLED in 2.5 years.
Total annual interest costs reached $1.1 trillion in Q2 2024.
In July, total US Federal debt hit $35 trillion for the first time in history.
Since 2020, the US has now added ~$12 TRILLION in Federal debt.
In other words, the US has added an average of ~$280 BILLION of Federal debt EVERY MONTH since January 2020.
This is a crisis.
Since 2020, the US has now added ~$12 TRILLION in Federal debt.
In other words, the US has added an average of ~$280 BILLION of Federal debt EVERY MONTH since January 2020.
This is a crisis.
As rate cuts begin, the US Dollar Index, $DXY, is getting crushed.
A weaker US Dollar makes it less expensive for foreign investors to buy gold.
This, combined 2008-style interest rate cut policy, has sent gold through the roof.
A weaker US Dollar makes it less expensive for foreign investors to buy gold.
This, combined 2008-style interest rate cut policy, has sent gold through the roof.
Meanwhile, US government expenditures as % of GDP just hit 43%, matching levels seen during the 2008 Financial Crisis.
To put this into perspective, spending as a % of GDP is 1% below World War 2 levels.
The US government is spending as if we are in a crisis.
To put this into perspective, spending as a % of GDP is 1% below World War 2 levels.
The US government is spending as if we are in a crisis.
All while Treasury Secretary Yellen and Fed Chair Powell have made a "soft landing" their base case.
That's right, spending at WW2 levels and calling for a "soft landing."
Since 1980, one 1 soft landing has ever been achieved by the Fed.
That's right, spending at WW2 levels and calling for a "soft landing."
Since 1980, one 1 soft landing has ever been achieved by the Fed.
Sum it all up and you have:
1. An economy that is weakening
2. Geopolitical tensions across the world
3. The weakest US Dollar since July 2023
4. 2008-style Fed interest rate cuts
5. Government deficit spending at World War 2 levels
Gold knows this is not a "soft landing."
1. An economy that is weakening
2. Geopolitical tensions across the world
3. The weakest US Dollar since July 2023
4. 2008-style Fed interest rate cuts
5. Government deficit spending at World War 2 levels
Gold knows this is not a "soft landing."
We've been trading gold for over a decade now through our premium member analysis.
All commodities and bonds are beginning to show similar signs.
Interested in receiving our analysis and alerts?
Subscribe now for instant access at the link below:
thekobeissiletter.com
All commodities and bonds are beginning to show similar signs.
Interested in receiving our analysis and alerts?
Subscribe now for instant access at the link below:
thekobeissiletter.com
Since 2020, our calls are up over +340%.
We just published our most recent trades for premium members.
Subscribe below to see how we are positioned into this week and access our private alert feed:
thekobeissiletter.com
We just published our most recent trades for premium members.
Subscribe below to see how we are positioned into this week and access our private alert feed:
thekobeissiletter.com
Loading suggestions...