Paper gold painted a hammer candle today on a big intraday reversal in price at support near 1625. The hammer came on normal to mediocre volume and therefore does not lead me to believe that this is a signifies a big reversal of trend. Support remains at 1625 and resistance is the 18 day moving average and chart support near 1655. The down trend is still in place with another lower low for the recent lower high. The technicals studies are still range bound in the neutral to bearish region. I think the paper junkies have worn themselves out watching their trading algorithms do war. Expect more sideways until a “story” materializes for gold, LOL!!!
How about this story: nothing has changed, gold is the premier reserve asset that can claim zero counter-party risk. This is only true for physical gold in your own possession. Jim Rickards just did a piece here for USNews that underscores the reality that physical gold still to this day underpins international clout in all things monetary. FOFOA has been saying this and quite simply the value of gold is not what our currency says it is. The central banks value gold at a price much different than what this chart indicates. So should you. The price on this chart is a screaming bargain that virtually nobody but us Freegolders, a small number of very wealthy individual who hold inter-generational wealth in gold bullion, and the central banks know about.
Inter-generational wealth needs to pass on to future heirs and central banks need a stable reserve for the inevitable day when their debt based reserve assets incinerate in the fire of hyperinflation. As FOFOA says, walk in the footsteps of Giants. Be like them and do what they do. Value your physical gold as priceless, for one day soon enough it will be apparent to all that this is the case. Front run that certainty. Gold, go and get some physical today while it is on fire sale for only exclusive “in the know” VIPs only.
The expanded view shows the right shoulder is still in place and holding at 1613.
The weekly chart shows price on the lower trend channel boundary, RSI and stochastic at support levels. Stochastic looks like it is beginning to hook.
The monthly chart says 1580 is support at the 18 month moving average. Both RSI and stochastic have reached support levels. This along with the weekly chart are saying that most of the downside potential in paper gold is gone. There is real risk to the US dollar based international monetary and financial system if the paper gold price gets too low. If this were to happen, the demand for physical could easily exceed the available supply and trigger a panic into physical gold. This panic would see a massive flow of capital into the dollar first, then from the dollar into physical gold.
Capital must flow through the dollar to get to physical gold. When this occurs the demand for dollars will exceed the available supply and the relative price of dollars will rise. This will smash the paper gold paper gold price. Then those dollars will flow into available physical gold supply that is priced by the paper gold market. In very short order supply of physical gold will be exhausted. There are far more dollars than their are ounces of physical gold priced at the paper gold price. The result is that physical gold will be all bid and no ask. Everyone will be a buyer and nobody will be selling. Physical gold will have become priceless and the paper gold market will cease to function.
The price of gold will be largely unknown to us ants because there will be no standardized market to discover price. This will be reality for some time until the giants step forward and establish a price that they already know and use amongst themselves. They will introduce this new price to us ants and it will light up our little antennas like we have never seen before. We ants will be introduced to a new international monetary system that holds it reserves in physical gold instead of paper assets that are someone else’s liabilities. We ants will be introduced to Freegold, where gold floats free of all currencies and the production of credit. It will be allowed to maintain a stable value over time without the dilution of paper gold ounces.
You can only be what you can be, an ant. But, you can act like a giant and walk in their footsteps. Go to the FOFOA blog and learn about Freegold. It is why the blog exists and what it is solely dedicated to. Use the yearly compendiums found at the Ron’s Air-friendly PDFs link, where every article posted can be found in PDF format, with active hyperlinks and complete table of contents. These compendiums are great a tool to search for specific articles, topics, and phrases. There are very convenient for offline reading as well.