Gold has a unique ability to detect inflation, and as soon as the threat passed, gold retreated while overall asset prices rose. Unlike strict graphic technicians, when evaluating the gold market I also include a broader perspective, for example, taking into account monetary dynamics and macroeconomic fundamentals. This means that there are more than real interest rates, because gold is more sensitive to inflation than bond yields. This allows us to make some important assumptions about what the gold price per ounce will do in the coming years. Given the cyclical nature of the markets, the upward movement in gold prices is likely to remain intact for several more years.
Let's return to the idea of cyclicality in the gold market and to future patterns that rhyme with past history. However, gold has usually recovered quickly once the threat of deflation passes, a sign of asset quality. Gold has a unique ability to detect inflation, and as soon as the threat passed, gold retreated, while overall asset prices rose. If gold is traded at a discount, it is possible to lose money, but it is difficult to lose a lot of money, and vice versa.
Any forward-looking statement regarding the forecast of the price of gold should not be used or interpreted as investment advice. As mentioned earlier, I believe that the two factors that will have the biggest impact on the price of gold will ultimately be monetary policy and geopolitics. But there is a fairly clear relationship between the stability of the neo-liberal financial order (or lack of it) and the demand for gold as a way of preserving wealth.
