Gold/USD risk prediction | 05 November 2021
Gold Price Forecast relative to
Long Term Quarterly, Monthly - Medium Term Weekly - Short Term Daily - and Hourly (not shown) risk weight data.
(Previous update in brackets)
|Au Trend||↑ (↓)||↑ (↑)||↑ (↓)|
|Au % Risk
|31 (30)||70 (60)||71 (70)|
Portfolio allocation 40% (40%)
Physical Gold: Nature's currency
05 November: A 1.8% price hike in the gold price was the final print for last week. Not spectecular and we sense the battle between Precious metals and other asset classes, in particular crypto, getting hotter. At face value, the AROI on Metals clearly appears less attractive an investment and the market seems to very much like the higher risk alternative. The convinving sounding narratives in both mainstream and alternative media drive more speculative interest into crypto which is surely eating away the precious metals market cap. A 4X crypto market will outpace the market cap of gold if the gold price holds at current level. A simple balanced portfolio that will largly preserve wealth relative to the future cost of goods and services is what we aim for. Until now we substantially outperformed that goal and feel very confortable with the present distribution including 12% of physical gold.
Gold risk weight already is trending up or has recently turned up in all time intervals, Daily, Weekly, Monthly and Quarterly. We will patiently monitor how this develops into 2022. No Change.
31 October: Friday's close also marks the end of October and again the metals had trouble holding their levels on this Friday October 29. The long term consolidation in the $1700-$1900 range since 1 year show a similar pattern as the consolidation and corrective period in 2008. We expect Monthly risk weight to follow Weekly risk upward. Whilst the short term technical picture is inconclusive the key is patience, because the world monetary system is potentially explosive.
50 years of excessive money printing in ever larger quantities is the primary reason why crypto tokens are so popular today. National authorities appear to not yet see this danger and if they do, have no response to the massive economic risk that lies ahead. That risk is a parabolic further divide between 'rich and poor'. The risk that the crypto market will also grow much faster than currently forecast at roughly 2X in 6 or 7 years. There are different forecasts floating, but what if this market grows by 10X in 2 or 3 years. What if SHIBA UNI overtakes Bitcoin Market Cap, currently at 1.2 trillion dollars, in 'no time', simply because it is the smallest penny crypto around and 1 Billion newcomers in the crypto space decide to buy, amongst other tokens? Is it possible? This would create serous speculative havoc in financial markets and also drive hyperinflation due to widespread opportunity consumer expenditures. Broad Tulip mania. Central Banks and G20 will need to respond with a hard reset to restore trust in fiat. And since they only own gold that represents any value, we stay with precious metals as the core investment insurance.