first majestic silver

Gold: Can Anything Outperform It? - August 08, 2023

President of Graceland Investment Management
August 8, 2023

Gold is money, and this is a magnificent fact.

Gold is a reserve currency for most central banks.

Central banks continue to add gold to their reserves and the pace of their buying is clearly “peppy”.

Silver should also be money, and technically it is, but it’s no longer a main central bank reserve asset.  

This is one of the main reasons that the silver versus gold ration hasn’t taken out the 1980 highs. The other reason is of course… a lack of inflation.

August 22 is the next BRICS meet, and it will likely mark a significant low for the price of both gold and silver versus American fiat money.

While I’ve urged all gold bugs to be skeptical about an imminent launch of a BRICS gold-backed currency, a major expansion of the BRICS members is highly likely to happen at this meeting. There is also likely to be strongly worded statements of concern about the ongoing actions of the US government that are de facto bullying.

That means de-dollarization is set for fresh impetus.

Could gold make a key low before August 22? 

Double-click to enlarge this oil chart. Note the double-headed inverse H&S base pattern that’s now in play.

The August 10 US CPI report (this Thursday!) could be the catalyst that sends gold shooting higher from the current right shoulder low but…

If the CPI report is a dud for gold, it’s highly likely that gold mimics oil and puts in a second head of its inverse H&S pattern.  

That second head would almost certainly coincide with the BRICS meet on August 22. From there, a massive rally to $1980 and then to $2080 would be the next order of gold bug business… and celebration!

All gold bug eyes should be on the US CPI, the BRICS meet, and the 4.33% high for the US government ten-year bond yields.

Note that when the ten-year yield was last at 4.33%, gold was near $1600. Now gold is $1930 with yields at almost that same high. This is a tremendous display of strength for the world’s mightiest metal and ultimate currency!

The 2021-2025 war cycle? While US citizens have built a real economic empire, I’ve argued that the US government looks more like a mafia than an empire. The government brags endlessly about itself and its “mightiness”, yet it’s failed to win any recent war except its illegal bully war against the tiny forces of Panama.  

The government’s current scheme is to financially ruin the citizens of Russia so they will engage in civil war. This has already turned into yet another debt-oriented fiasco for America, and Ukraine is a de facto wasteland.

With the Ukraine failure becoming obvious to even the silliest US citizens, the government mafia needs a new war, and fast, to keep the citizens in war worship mode. Maybe Niger fits the bill; most US citizens don’t know anything about it, and it’s a softer target than Russia.  

The bottom line: Whatever nation is chosen for US government “Madmaxification” next is unknown, but it’s obvious that one will be chosen… so it’s critical for all citizens to embrace gold whenever there’s a significant price sale for it… and one is underway right now.

A daily focus on the big picture is critical for investors as inflation, recession, the 2021-2025 war cycle, a wildly overvalued stock market, debt ceiling horror, and empire transition dominate the investing landscape. I cover this big picture 5-6 times a week in updates just like this one, my flagship Galactic Updates newsletter. At $199/year, investors feel the price is too low, but I’m offering a $179/15mths “special CPI & BRICS meet offer” that investors can use to get in on the winning action and meticulous analysis. 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? 

Double-click to enlarge this GDX chart. There are some basic “rules of the gold bull era road” for mining stock investors to follow. First and foremost is to hold enough fiat to remain emotionally stable and weather gold stock dips like this one.

The dollar’s rally from the big 100 number buy zone continues, but it’s likely to fail as the BRICS meet and the 4.33% ten-year yield become resistance. Regardless, it’s prudent to hold significant fiat cash as long as what an investor buys is priced in that fiat.

A second investor rule is this: when placing actual buys for gold stocks, it’s mostly gold bullion price action that matters. Note that as gold arrived at my $1900 buy zone in late June, GDX was trading at about $29-$30.

I suggested then that investors should focus on buying gold bullion ETFs and physical gold rather than the miners there. Now GDX is back at its $29-$30 lows, yet gold is $1930, well above the $1893 low of late June! 

A second arrival of gold in the $1900 buy zone around this week’s CPI report and/or August 22 BRICS meet could see GDX hold its ground, but it’s much more likely that it trades near the $26.50 low.

If gold does trade at $1900 again, this time I will be an eager mine stock buyer, and I would expect a significant rally from $26.50 for GDX and most individual miners should have very big rallies too. If the ten-year yield is capped at around 4.33% again, and it likely will be, Oct 31 Halloween candy handouts could include some very sweet $2080 gold!

Thanks!

Cheers

St

Special Offer For Gold-Eagle Readers: Please send me an Email to [email protected] and I’ll send you my free “Get Jacked With J!” report. I highlight key GDXJ stocks that could surge after Fed man Jay’s speech this week! Both core and trading position tactics are included in the report.

Stewart Thomson

Galactic 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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