Sirwin
Sirwin
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Gold Falls Below $2K. First Time In Two Months!


This morning, I released a post just before the U.S. CPI report came out. I showed how gold was suddenly rallying. In fact, gold had rallied up to $2,031 right before the report came out. Well, that rally didn't last long. When news hit that CPI came in hotter than expected, gold took a somewhat nasty tumble.

For the first time in exactly two months, the powers that be have managed to push the price below $2K, going as low as $1,988 just before noon. For two months running, gold has been under attack but gosh darnit, they couldn't do it until this morning. Already though, gold has recovered to $1,995 and I expect it to go back above $2K soon, maybe before the day is over?

Spot Gold - February 13, 2024 (2)

It looks massive but it's really just $30 / $40. Gold will recover soon enough. You really expect gold to stay down with all this 'Year Of The Dragon' party going on? The Chinese are buying gold at a record pace and higher prices isn't stopping them. They'll probably just buy more today. Demand for all forms gold hit a record 4,899 tons for all of 2023 while central bank buying has topped 1K tons for two years in a row. If demand continues unabated like this, it seems logical the gold price is headed higher.

All in all, inflation has gone up 18% since Biden took office, according to this Zero Hedge article out this morning while the USD hit a three month high after the CPI. I noted this morning the dollar was shooting straight up so I knew something was up. The dollar jumped from a low of 103.970 to 104.833 where it now sits. I noted on February 5 that the USD had jumped two full points in the previous 30 days and speculated then that the dollar might go to 107.  That very day the USD recorded its last previous high 104.576 before dropping a bit to around the 104 handle where it stayed right up until today, when it suddenly shot up and looked something like this.

graph

Bitcoin, which was last at $50.2K around 5 am, has seen its price fall to $48.8K.  That's OK. Bitcoin is still doing quite well since hitting a low of $42,758 on February 6, a week ago. Bitcoin is the unanimous winner here, for sure!

 

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As for oil, the good news is the price hasn't shot higher than expected. WTI is still up another dollar per barrel and is now above $78 while Brent is just under $83. Even OilPrice.com is noting that oil remains steady in spite of hotter inflation numbers. Oil is also another reason I remain bullish on gold. A strong dollar is bad for gold but strong oil tends to lift gold. Unless of course, oil crashes but I really don't see that happening with all the tensions going on around the world.

European central banks have been hinting at revaluing their gold. An article published on Kitco News indicates revaluation plans in a new financial paradigm. Something most people don't know is that historical gold bars held by central banks are still valued at 1971 prices. Don't be too too surprised if there' a sudden announcement of a massive revaluation of central bank gold sometime in the not-too-distant future.

 

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Peace and love to everyone.

 

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SweptOverNiagara
SweptOverNiagara

Name's Joe and I live in Ontario, Canada. I like writing on a wide variety of topics. I enjoy keeping track of markets, investing and commodities and the crypto sector. Also do some coding for web browsers.


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