first majestic silver

Gold $1808: Will It Make Investors Great?

President of Graceland Investment Management
February 28, 2023

For many years the yen was the preferred safe-haven currency for the largest bank FOREX traders. The topping action of the yen in 2011 created a huge US stock market buy signal. In 2015, the yen’s bottoming action helped create a massive buy signal for gold.

In 2022, the BOJ (Japanese central bank) refused to hike rates like the other major banks did, and so the dollar is once again the world’s main safe haven fiat currency. 

That means the USDX price action is again very important to the gold price action. 

USDX daily chart.

The 105-106 area is resistance for the dollar, which means it’s support for gold.

The 105 area for the dollar corresponds perfectly with $1808 for gold.

I’ve laid out $1830-$1780 as a buy zone for gold investors, with $1808 functioning as the “meat and potatoes” of the zone. 

The big picture? The main themes in play are war, stagflation, and empire transition. These themes make currencies (mainly gold and the dollar) the investments that are most likely to do well.

Commodities and mining stocks benefit indirectly, but when these three big themes are in play, the stock market, real estate, and bonds all tend to struggle.

Or crash.  

American citizens built one of history’s most prosperous economic empires. They did it despite their government, which has spent most of the last 100 years using debt and extorted citizen money to fund endless wars in a myriad of faraway lands.

The government has failed badly in almost all these wars, but continues to start new ones with wild promises of sure-fire victory.

BDRY “shipflation” chart.  

Is BDRY a lead indicator for oil? I think so; both have large bull wedge patterns, and the “breakout” for BDRY was followed with substantial “wet noodle” rectangular price action on the chart. The oil price breakout looks similar.

Note the huge volume coming into BDRY now. I’ve urged investors to be eager buyers, but with modest size because it’s not the ultimate asset that gold bullion is.

The Chinese re-opening is real. It’s taking shape as a U-bottom, not a V. Inflation in America is proving to be as sticky as I suggested it would be, meaning the central bank will be hiking more (as Jay said he would). The rate cuts demanded by money managers later in 2023 are unlikely to happen.

The Ukrainian government will face much more pressure to “put up or shut up” if oil and the BDRY surge higher. That’s because American citizens will begin to get angry as another round of inflation begins.  

Biden will be under huge pressure to end the war before it turns into the multi-trillion dollar quagmire, and he’ll apply that pressure to the Ukrainian government. Unfortunately, he seems obsessed with dragging all the citizens of the West into another war, this time in Taiwan.

A daily focus on the big picture is critical for investors as inflation, the 2021-2025 war cycle, a wildly overvalued stock market, and empire transition dominate the investing landscape. I cover this big picture 5-6 times a week with updates like this one, in my flagship Galactic Updates newsletter. At $199/year, the price is too low, but I’m offering a $179/15mths “super special” that investors can use to get in on the action. Click this link to get the offer or send me an email and I’ll get you a payment link. Thanks!

What about the miners? Well, that’s my main focus for investors as gold trades at $1808. 

XME chart. 

XME provides investors with a mix of precious and industrial metal companies.  

There is a H&S top in play, but there’s also an up channel and the demand line is holding firm. XME tends to be more resilient than GDX and GOAU on metals market reactions, and that’s certainly been the case on this pullback.  

It’s a decent holding for conservative metals market investors.

With the 40th anniversary of the XAU index roughly here, it’s clear that since inception, the index has failed to gain any ground against US fiat.

The bottom line: A buy and hold approach worked in the 1970s and it will work again, but until mainstream money managers fall in love with the miners, my suggested investor approach is to buy the intermediate and senior miners here at gold $1808-$1780 and sell them with roughly 20% gains… gains that could materialize over the next couple of weeks.

GDXJ chart. 

Clearly, the $32 zone is in sync with USD 105 and gold $1808. Buying miners here at $1808 is an act of basic common sense, and if oil and BDRY turn higher while there’s a surge in GDXJ volume… it should make investors feel great!

Special Offer For Gold-Eagle Readers: Please send me an Email to [email protected] and I’ll send you my free “CDNX $1 Hot Shots!” report. I highlight key junior gold and silver miners on the move, and an interesting junior oil stock play. Key investor tactics are included in the report!

Thanks!

Cheers

St

Stewart Thomson

Graceland Updates

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Stewart Thomson is a retired Merrill Lynch broker. Stewart writes the Graceland Updates daily between 4am-7am. They are sent out around 8am-9am. The newsletter is attractively priced and the format is a unique numbered point form. Giving clarity of each point and saving valuable reading time.

Risks, Disclaimers, Legal

Stewart Thomson is no longer an investment advisor. The information provided by Stewart and Graceland Updates is for general information purposes only. Before taking any action on any investment, it is imperative that you consult with multiple properly licensed, experienced and qualified investment advisors and get numerous opinions before taking any action. Your minimum risk on any investment in the world is: 100% loss of all your money. You may be taking or preparing to take leveraged positions in investments and not know it, exposing yourself to unlimited risks. This is highly concerning if you are an investor in any derivatives products. There is an approx $700 trillion OTC Derivatives Iceberg with a tiny portion written off officially. The bottom line:

Are You Prepared?

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Stewart Thomson is president of Graceland Investment Management (Cayman) Ltd. Stewart was a very good English literature student, which helped him develop a unique way of communicating his investment ideas.  He developed the “PGEN”, which is a unique capital allocation program. It is designed to allow investors of any size to mimic the action of the banks.  Stewart owns GU Trader, which is a unique gold futures/ETF trading service, which closes out all trades by 5pm each day. High net worth individuals around the world follow Stewart on a daily basis.  Website: www.gracelandupdates.com.


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