Small cap gold stocks are going insane the past few weeks.
I said in a few posts that gold would DEFINITELY go past 1500 and I think it will cross 1650 this year.
I just didn’t expect it to cross 1500 THIS WEEK!!
14 trillion dollars out there earning negative interest in the world and the tariff issues with China as well as more rate cuts to come could send gold to 2000 again next year.
Even once an agreement is made with China, it won’t be long before they break it and and land in trouble again.
I believe eventually Trump will be successful with China but it won’t be fast and it won’t be easy.
Like some of my ex’s :)
there is a graph floating around which shows a 1-1 correlation between the price of gold and negative interest bonds. Currently all the negative interest bonds are in europe and asia. The usa is one of the few countries with positive interest bonds so money flows toward the USA. That’s why both the dollar and gold are rising.
China has a few advantages. Xi doesn’t have to run for re-election. Trump does. They are not a debtor nation. We are. They can take an economic hit and, at least in the near term, shrug it off. There is a limit to how much pain we can take before people will start to question Trump’s policies. If we slip into a recession over the next 12 months, Trump could lose the election. My guess is that this is China’s near term objective.
As for what is going up, or might... I’ve been nibbling in silver for most of the last year. Historical silver:gold price ratios suggest silver is cheap relative to gold.