Last Friday, gold closed at $1,938 per ounce, up $14 for the week on excellent volume, considering it was a holiday week. During the trading week, gold showed excellent stability, closing the four days trading within a $20 range from high to low.
After reaching an all-time high of $2,070 on August 7th and seeing a selloff (profit taking) on August 12th, taking the price down to $1,870, we are now seeing base building. For the past month, August 13th to Sept 13th, the gold price has traded between $1,902 and $1,998 per ounce. If that isn’t base building and a great example of price consolidation, nothing is. I think we are now ready to move on to set a new all-time high of $2,200 before year end, and the following are my ten reasons why.
- Continued debasement of the world’s currencies, based on trillions of Dollars, Euro, Yen and Yuan being printed that destroys the buying power of those currencies. Government debt and deficits are growing at an extraordinary pace and cannot be reversed.
- World interest rates are at historic lows, ranging from -1% to + .70% on government debt, with our Federal Reserve stating that “They aren’t even thinking about, thinking about rising rates.” Low interest rates make owning gold more attractive and less costly.
- Increasing demand from governments and financial corporations. Russia, China and many other Central Banks are trading U.S. Dollars for gold to increase their national reserves. Many well-respected financial managers, (i.e., Warren Buffett has now made investments in gold).
- Gold has been raised to a Tier 1 financial asset by the World Bank and many financial corporations and governments now have the ability to invest in gold (i.e., The State of Ohio allocated 5% of its $16 billion pension fund for gold).
- 12 States have made or have proposed legislation to make Gold/Silver Legal Tender.
- West Virginia, Utah, Louisiana, Texas and Oklahoma have passed legislation to make U.S. minted Gold/Silver Legal Tender and, in some states, exempt of state taxation.
Wyoming, Arizona, Kansas, Indiana, Missouri, Tennessee and South Carolina have had legislation proposed and is pending or has failed. Many of the legislations and laws allow gold/silver to be free from sales tax and, in some cases, free from state taxation.
These states are concerned about the debasement of the U.S. Dollar and want to give their citizens an option of owning REAL MONEY, gold and silver.
- Our Federal Reserve has recently announced that they are abandoning current Inflation polices in regard to monitoring monthly inflation number, which could raise interest rates. Also, they are talking about another round of “Quantitative Easing” later in 2020 and in early 2021 to help the economy recover from the COVID-19 pandemic.
- Geopolitical problems around the world, with unrest in China, Russia, Iran and other countries, causing a threat to the U.S. democracy.
- China is working on replacing the U.S. Dollar with the Chinese Yuan as the World’s Reserve/Reference Currency. China’s trillions in reserve assets and growing gold reserves versus massive deficits and growing debt from the U.S. is likely to make it happen.
- Gold is a world financial asset and is priced in hundreds of currencies daily. Americans look at gold priced in Dollars. With the U.S. Dollar in a downward trend, based on the world’s economies recovering from the COVID-19 pandemic before the U.S., it is likely to continue to drop, making the value of gold move higher.
- Demand for popular physical gold and silver investment coins and bars has increased this year by over 200%. The U.S. mint and many other world mints have been back-ordered on many of the popular items while reporting record sales.
Barry Stuppler has been a professional numismatist for 60 years, and considered one the nation’s foremost experts in rare coins and precious metals. Mr. Stuppler is a past President of the American Numismatic Association (ANA) and Professional Numismatists Guild (PNG). He is currently chairman of the Federal and California State Gold & Silver Political Action Committees. Barry Stuppler, as president of MintStategold.com is proud to say he has help over 10,000 rare coin and precious metal investors and collectors to build their collections and holdings.
Author: Barry Stuppler
Source: Kitco: Ten reasons you need to add more gold now