Gold Revisits Neverland

Nearly five years ago came our May 24, 2014 piece entitled "Gold in Neverland" where we bemoaned that for "...26 of the last 28 trading days (better than a month), Gold has traded in the 1290s...", its never having been able to materially escape said 10-point zone -- hence the name Neverland -- and its then being nicknamed The Whiny 1290's.

Thus far for 2019 with eight trading days in the books, Gold's settle yesterday (Friday) at 1288 finds price up 3 points for the year, just less than one quarter of one percent. The good news is that Gold is at least trading (barely) above The Box (1240-1280), albeit still not sufficiently so (as stated a week ago) to morph that 40-point swath from resistance to support. The bad news is that -- save for trading (barely) in the 1300's for 16 minutes early in the 04 January session, Gold for the most part has thus far made its New Year's home back in The Whiny 1290's, indeed having therein traded at some point for all eight days year-to-date. Great. Wake me up when we leave this state.

And the above Gold Scoreboard which always "tells it like it is" --(Howard Cosell) in citing price rather than change puts it stark in our face: Gold's price is above where it was at this time both two and three years ago and is below where it was one year ago. Nothing but status quo. And yet throughout, the driver of debasement -- our M2 money supply -- continues its ascent such that Gold by all rights today "ought be" priced at 2876.

To be sure the 3Ds of Debasement, Debt and Derivatives aren't giving back any ground. At an impromptu locker room gathering this past Thursday with a few of our Investors Roundtable members, one while lumbering past poised for a moment and with towel in hand adroitly pointed a firm finger at an image on the big screen television of Federal Reserve Bank Chairman Powell and said: "How dare they talk about the debt when they created it!"

 Brings to mind that Dire Straits lyric from back in '85: "...easy money for nothing." But today, $20 trillion in unrepayable debt is something.

Pointing a finger as well is the global head of sovereign ratings over at Fitch, James McCormack, essentially telling the U.S. government to get fully back to work by February's end, else the rating of AAA may lose an A. Okay.

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