Gold: A Timeless Safe Haven as US Election Highlights Fiat Fragility
2024.11.05 11:56
Today is the US election. It’s unlikely to change the fact that fiat has failed… or change the disturbing fact that most Western citizens still have no .
The long-term fiat failure chart. During Trump’s last term, his government’s fiat melted away against supreme money gold, and the same thing has occurred with Biden. The bottom line:
Fiat is as barbaric as the IRS. When it comes to weaponizing money, the biggest weaponization hasn’t been sanctions or frozen accounts (as hideous as those government schemes are).
Instead, the biggest weaponization has been the use of fiat as a tool of dilution, used by governments and central banks to destroy the purchasing power of the most vulnerable citizens.
When it comes to gold and the US election, the election is essentially irrelevant. That’s also the case with gold and the upcoming FOMC meet. The bottom line:
When it comes to supreme money gold, most of China and virtually all of India have the answer: All that matters is getting more of it!
The bigger the price sale, the more gold investors should buy.
The simplest approach is to simply buy incrementally every $100 down, but gold tends to rally most significantly from large zones of congestion that are created by previous highs and lows.
Amateur investors tend to execute their buys based on their price projections rather than by planning accumulation campaigns at lower prices… prices that analysts may or may not be projecting.
In contrast, professional investors make preparations to handle buying in a wide array of scenarios.
What can be said about the current gold market is that key weekly chart oscillators have “nosebleeds”. A general rule of thumb is that while gold can move significantly higher in this situation, the oscillators eventually return to an oversold state. It tends to be prudent to save fiat cash to buy the most gold there.
Here’s a look at the gold price action around the 2016 election. A lot of Western gold bugs thought the Trump victory would send gold soaring. It did… but not for long. They were shocked when it reversed during the night of the election and quickly ended up about $200/oz below its election night high.
In contrast, professional accumulators were prepped to buy into $1140-$1130 before the election took place, and they calmly bought into the mayhem. Gold is now almost triple that price.
The long-term chart looks phenomenal. Gamblers can always buy a chart that looks as good as this one, but investors need to show the required patience that goes along with savvy accumulation of this mighty metal.
Currently, the big metals market theme is enjoying the upside ride. That will eventually change to price sale accumulation at pre-set markers. While gold is overbought, there’s no bearish action on the charts
The chart. A huge Elliott C Wave is likely in play, and the junior stocks should be clear leaders on the next move up.
Looking at the weekly chart, while Stochastics overbought and almost overbought, the long-term TRIX indicator is just rising over the zero line. Any pullback now would create a right shoulder on what is clearly a base pattern of significance. This is an obvious “buy the dips” market and the CDNX action is a very positive signal for the other metals market sectors too.
Gold, silver, and mining stock investors should note that regardless of who wins the US election, there’s still significant time left in the 2021-2025 war cycle… and tension between the governments of Israel and Iran is high.
A Trump victory could see Israel get a US government “blessing” to attack Iran’s oil refineries, while a Harris victory could see Iran view the US as pulling back on its support for Israel. Regardless of who wins, the US election is likely to be followed by a ramp-up in war cycle tension. It could be enough to bring nervous fund managers into the gold market, pushing the price to $3000+ before year-end.
At that point, Chinese New Year buying would be underway. If there is to be a blowoff on gold and a major sale in the price that ends the overbought situation, it may not happen until after the next Chinese New Year “Golden Week” holiday ends in early February of 2025!
The daily chart. As with gold, silver, and the CDNX, there’s nothing bearish on the chart. The overbought situation has been worked off and Stochastics is almost oversold.
There’s a gargantuan cup and handle pattern in play on this weekly chart. The question investors may want to ask themselves is whether the gold market is a boxing match or a street fight. If it’s a street fight (and I’ll suggest it is) then no handle is required for a cup. There could be an upside breakout and a surge towards the $60 target… straight out of the saucer!
In 2016, the US election featured gold in a massive base pattern. In the 2020 election, the end of zero rates began, and what is likely a 40-year inflation cycle got underway. At the start of the cycle, rising rates put pressure on gold. That pressure has faded. It’s been replaced with growing institutional concern about global government obsession with debt, and there’s been a vertical surge for gold! Some voters will be ecstatic after the election results are announced, and others will be despondent. My suggestion is for all voters to stay as close as they can to supreme money gold!
