The gold price’s “coffin lid” can’t hold it down anymore
The gold price plunge from March to July this year is very abnormal. According to the natural law of prices, gold should surge in December and January, have a modest pullback in February and March, and then continue rising—this is the normal pattern.
But later, two abnormal, human-made events appeared that dragged down the gold price: the war in March and the U.S. Treasury-bond crisis in mid-May.
When the gold price crashed in March, all kinds of people jumped out to force explanations—things like “gold doesn’t generate interest,” “gold has lost its safe-haven function,” and “the oil crisis means you should sell gold to buy oil.” These explanations are all very far-fetched.
This suppression is clearly man-made. The purpose should be to prop up the U.S. dollar and suppress the opposing position in gold that the dollar’s challengers hold. Then in mid-May, starting around 511 to 512, U.S. Treasury yields broke above 5%. Big funds dumped non-interest-bearing gold, bought U.S. Treasuries, and also pushed the gold price down another wave.
But the gold price has strong support below. The large gold shorts are those funds that believe in the U.S. dollar and U.S. Treasuries. The large gold longs are those funds that don’t believe in the U.S. dollar and U.S. Treasuries.
Both sides—bulls and bears—stayed locked in a range around 4,000. After two months of grinding, the shorts retreated. Gold couldn’t be suppressed anymore, so it launched a violent rebound.
$XAUT
The gold price plunge from March to July this year is very abnormal. According to the natural law of prices, gold should surge in December and January, have a modest pullback in February and March, and then continue rising—this is the normal pattern.
But later, two abnormal, human-made events appeared that dragged down the gold price: the war in March and the U.S. Treasury-bond crisis in mid-May.
When the gold price crashed in March, all kinds of people jumped out to force explanations—things like “gold doesn’t generate interest,” “gold has lost its safe-haven function,” and “the oil crisis means you should sell gold to buy oil.” These explanations are all very far-fetched.
This suppression is clearly man-made. The purpose should be to prop up the U.S. dollar and suppress the opposing position in gold that the dollar’s challengers hold. Then in mid-May, starting around 511 to 512, U.S. Treasury yields broke above 5%. Big funds dumped non-interest-bearing gold, bought U.S. Treasuries, and also pushed the gold price down another wave.
But the gold price has strong support below. The large gold shorts are those funds that believe in the U.S. dollar and U.S. Treasuries. The large gold longs are those funds that don’t believe in the U.S. dollar and U.S. Treasuries.
Both sides—bulls and bears—stayed locked in a range around 4,000. After two months of grinding, the shorts retreated. Gold couldn’t be suppressed anymore, so it launched a violent rebound.
$XAUT