For many years the yen was the preferred safe-haven currency for the largest bank FOREX traders. The topping action of the yen in 2011 created a huge US stock market buy signal. In 2015, the yen’s bottoming action helped create a massive buy signal for gold.

In 2022, the BOJ (Japanese central bank) refused to hike rates like the other major banks did, and so the dollar is once again the world’s main safe haven fiat currency. 

That means the USDX price action is again very important to the gold price action. On that note,

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USDX daily chart

The 105-106 area is resistance for the dollar, which means it’s support for gold.

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daily gold chart

The 105 area for the dollar corresponds perfectly with $1808 for gold.

I’ve laid out $1830-$1780 as a buy zone for gold investors, with $1808 functioning as the “meat and potatoes” of the zone. 

The big picture? The main themes in play are war, stagflation, and empire transition. These themes make currencies (mainly gold and the dollar) the investments that are most likely to do well.

Commodities and mining stocks benefit indirectly, but when these three big themes are in play, the stock market, real estate, and bonds all tend to struggle.

Or crash.  

American citizens built one of history’s most prosperous economic empires. They did it despite their government, which has spent most of the last 100 years using debt and extorted citizen money to fund endless wars in a myriad of faraway lands.

The government has failed badly in almost all these wars but continues to start new ones with wild promises of sure-fire victory.

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BDRY “shipflation” chart  

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Is BDRY a lead indicator for oil? I think so; both have large bull wedge patterns, and the “breakout” for BDRY was followed with substantial “wet noodle” rectangular price action on the chart. The oil price breakout looks similar.

Note the huge volume coming into BDRY now. I’ve urged investors to be eager buyers, but with modest size because it’s not the ultimate asset that gold bullion is.

The Chinese re-opening is real. It’s taking shape as a U-bottom, not a V. Inflation in America is proving to be as sticky as I suggested it would be, meaning the central bank will be hiking more (as Jay said he would). The rate cuts demanded by money managers later in 2023 are unlikely to happen.

The Ukrainian government will face much more pressure to “put up or shut up” if oil and the BDRY surge higher. That’s because American citizens will begin to get angry as another round of inflation begins.  

Biden will be under huge pressure to end the war before it turns into the multi-trillion dollar quagmire, and he’ll apply that pressure to the Ukrainian government. Unfortunately, he seems obsessed with dragging all the citizens of the West into another war, this time in Taiwan.

What about the miners? Well, that’s my main focus for investors as gold trades at $1808.

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important XME chart

XME provides investors with a mix of precious and industrial metal companies.  

There is an H&S top in play, but there’s also an up channel and the demand line is holding firm.XME tends to be more resilient than GDX and GOAU on metals market reactions, and that’s certainly been the case on this pullback.  

It’s a decent holding for conservative metals market investors.

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XAU chart 

With the 40^th anniversary of the XAU index roughly here, it’s clear that since inception, the index has failed to gain any ground against the US fiat.

The bottom line: A buy-and-hold approach worked in the 1970s and it will work again, but until mainstream money managers fall in love with the miners, my suggested investor approach is to buy the intermediate and senior miners here at gold $1808-$1780 and sell them with roughly 20% gains… gains that could materialize over the next couple of weeks.

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GDXJ chart

Clearly, the $32 zone is in sync with USD 105 and gold $1808.Buying miners here at $1808 is an act of basic common sense, and if oil and BDRY turn higher while there’s a surge in GDXJ volume… it should make investors feel great!

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