Owning Physical Gold is to protect 80% of your assets | 09 April 2021
Gold Price Forecast relative to
Long Term Monthly (LT-M) - Medium Term Weekly (MT-W) - Short Term Daily (ST-D) - and Hourly (not shown) data.
(Previous week in brackets)
|Au Trend||↓ (↓)||↑ (↑)||↑ (↑)|
|Au % Risk
|49 (48)||20 (20)||84 (45)|
Portfolio allocation 35% (35%)
Physical Gold: Nature's currency
09 April close: Our Precious metals portfolio is for protection only as we have said from the very beginning. Our entry point is very low and we apply the simple 80:20 rule to our physical Gold, Silver and Platinum portfolio. Platinum is as good as gold and silver will either follow or lead gold as a rule of thumb. Gold still looks a little vulnerable looking at Monthly risk at 50% and down. Weekly appears to have bottomed but may have another spell of weakness. Our strategy is to be prepared for a rapid inflation burst probably sometime 2022 or earlier even. Markets typically pre-empt such events with strong reaction about 6 months before. Even though our crypto entries in 2019 and this year have overtaken our metals portfolio in size, those same crypto markets already represent a high risk inflationary and very speculative environment especially where the number of newly born trader participants are growing exponentially and as these markets continue to rally they will drive cpi higher until the bubble bursts. Bitcoin will NOT play that role (also see this week's crypto market comment). Gold remains a solid long term protection hold.
02 April close: Physical Gold has been underperforming and attention amongst small and larger investors is more focussed on Crypto and (fractional) equity trading. Dull markets tend to slip and Gold is no different and may even see some further weakness before the long term trend turns interim bullish again. Technically the metals still look bullish medium and long term. Our total metals portfolio has been adjusted to 35% due to a stronger increase of the crypto portfolio. Also check Quarterly Gold/USD risk comment below. Our original metals position with sufficient cushion remains largely unchanged. A hedge against a monetary pandemic.
09 April comment
Comment 09-April: Looking at this long term chart, which is pointing south, one would expect no different long term technical market behavior than in an hourly chart for instance. Hourly of course is more volatile with less stable volume. Protection confirmation will not arrive until we witness that very explosive market in real time and similar to what we see happening in crypto markets today. It is entirely possible, even likely, that a future scenario with a 10x or 100x or 1000x gold price buys only a bit more of the same product as it does today. It feels like that moment is getting ever closer and we should have healthy fear in owning metals, not trying to predict short term direction. History will repeat itself and most non productive assets will blow up in our faces.
Comment 02-April: The picture looks very bullish even though the risk trend is down. We see a price and risk picture developing which more similar to that during the 1st decade of the 21st century. Yet impossible to say how long uncharted MMT will survive, but central banks appear very accommodative as regards the major spending programs being announced. Hence a continued heavy weighting on precious metals whilst seeking potential in promising digital ventures outside of the traditional equity market.
Gold/Euro live price
9 April 2021: Euro strength versus USD has influenced a relatively weaker Gold price vs Euro in recent months. Otherwise the technical picture and reason for being protected is the same as for Gold/USD. 'HODL'
2 April 2021: Gold performed relative strong vs Euro due to a slightly stronger US dollar the past week. The narrative is very much the same based on a very similar technical picture. Gold is building a longer term bottom again and also remains a strategic fundamental hold with a safe 35% cushion since entry.
Gold/British Pound live price
9 April 2021: GBP finally took a decent breather in currency markets and made gold look a little stronger. Even this pair may not have finished the downtrend, but as we have argued in the FX section, GBP is more vulnerable to erosion due to a much weaker economic position in the world market. UK's biggest risk is an even more negative impact from leaving the European Union and a massive struggle to defend its position in the financial services industry due to a paradigm shift in regulated borderless digital banking services. Gold is a strong long term hold for GBP tax based investors.
2 April 2021: Even though GBP remains strongere than expected in the currency space the technical picture is the same as against USdollar. Daily Risk trend Up from deeper level, Weekly risk trend up from deeper, low risk, level and Monthly down into lower risk territory. Gold is a strong hold having started the current major uptrend in October 2018.